Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — NORTHERN IRELAND

Labour Force

Mr. Andrew F. Bennett: asked the Secretary of State for Northern Ireland what estimates are available to him of the likely variations of the labour force in Northern Ireland for the next 10 years; and by how much he expects an increase due to school leavers, and women wishing to return to work, in each of the next 10 years.

The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): The most recent projections of the Northern Ireland labour force were prepared in 1974 and are currently being revised. On the basis of the 1974 calculations the Northern Ireland labour force is projected to increase by 10·7 per cent. between 1978 and 1988, from 616,000 to 682,000.
The numbers of school leavers seeking employment are expected to increase until 1982 and then to decrease in line with the fall in the birth rate since 1964.
Information on the numbers of women wishing to return to work is not available. However, the labour force estimates project an increase of 24,000 between 1978 and 1988 in the numbers of married women in the labour force.
With permission, I shall supply further details in the Official Report.

LABOUR FORCE PROJECTIONS FOR NORTHERN IRELAND BASED ON CENSUS OF POPULATION 1971


Thousands



1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988


Males
408
411
414
417
421
427
431
435
439
444
450


Females
208
210
215
214
219
220
222
223
227
229
232


(Married Females)
(106)
(108)
(112)
(113)
(117)
(117)
(120)
(123)
(126)
(127)
(130)


TOTAL
616
621
629
631
640
647
653
658
666
673
682


Source: Derived from DE Gazette April 1974 P304–310.

Mr. Bennett: I thank my right hon. Friend for that reply. Is he aware that I am particularly concerned about the problem facing younger school leavers over that period? What steps is he taking to persuade employers to increase the number of apprenticeships between now and 1982 to take into account the fact that there will be a decline in the number of school leavers later?

Mr. Concannon: I implore my hon. Friend to keep this matter in the context of Northern Ireland because in percentage terms the problem is not as severe as it is in the rest of the United Kingdom. We calculate that our apprenticeship schemes are about 10 times better than in the rest of the United Kingdom. We have increased training scheme places from 4,000 to 6,000 per year.

Rev. Ian Paisley: How many places will be available in the various training schemes over this period?

Mr. Concannon: We have been running training schemes at the rate of 4,000 places a year and we are increasing this by 50 per cent. to 6,000 a year over this period.

Mr. Kilfedder: Will my right hon. Friend substantially increase the rates of the educational maintenance allowance? Will he make the payments directly to the students in order to encourage them either to stay on at school after they are 16 or to attend technical college up to the age of 19, instead of forcing them into the soul-destroying experience of signing on the dole?

Mr. Concannon: The problem in Northern Ireland is greater than in the rest of the United Kingdom. About 3½ per cent. more people are employed today than in 1966. But the problem in Northern Ireland is that an extra 7½ per cent. have come on to the job market.

Following is the information:—

SCHOOL LEAVERS SEEKING EMPLOYMENT


Year
16–19 years old seeking employment
Total 16–19 age groups (per Government Actuaries Department)


1978
…
…
…
…
15,600
111,400


1979
…
…
…
…
15,700
113,000


1980
…
…
…
…
15,800
114,400


1981
…
…
…
…
15,900
116,000


1982
…
…
…
…
16,000
117,300


1983
…
…
…
…
15,900
117,800


1984
…
…
…
…
15,800
117,800


1985
…
…
…
…
15,500
116,200


1986
…
…
…
…
15,100
114,400


1987
…
…
…
…
14,800
112,900


1988
…
…
…
…
14,500
111,700

Security Services

Mr. Freud: asked the Secretary of State for Northern Ireland what is the total amount of central Government aid to security service's other than those provided by police and the Ministry of Defence.

The Under-Secretary of State for Northern Ireland (Mr. James A. Dunn): It is estimated that during the current financial year £4,600,000 will have been spent in Northern Ireland by the Government on the security staff grants scheme and £3,187,000 on the civil search unit.

Mr. Freud: Does the Minister feel that this is the most efficient use of the huge Government contribution of £7 million-plus? Will he reconsider the advisability of giving ad hoc sums of money to employ fire watchers and organise this at a higher level and perhaps subsidise a training programme?

Mr. Dunn: There are many complexities interwoven in the hon. Member's question. The security staff grants scheme includes an increase in the number of fire officers employed outside working hours. This has been the result of intensive discussion in Northern Ireland. This is the scheme that is wanted. I shall draw the hon. Member's comments to the notice of those concerned.

Rents

Mr. Carson: asked the Secretary of State for Northern Ireland, in the light of the fact that sitting tenants of properties acquired by the Northern Ireland Housing Executive for the purposes of housing action areas are suffering substantial rent increases, which have no relation to the condition of the properties involved, what action he proposes to take to relate rents to housing conditions.

The Under-Secretary of State for Northern Ireland (Mr. Ray Carter): Northern Ireland Housing Executive rents are normally related to the condition of the dwellings and the amenities provided, and where dwellings are acquired with a view to their improvement or rehabilitation existing private rent levels are retained until the work has been completed

Mr. Carson: I am grateful for that reply. Is the hon. Gentleman aware that the tenants of these houses had their rents tripled when they were taken over by the Housing Executive? Will he ensure that they are charged the right rent which they were paying before the houses were taken over? Will he see that the rehabilitation of these houses is speeded up? They are in a deplorable condition.

Mr. Carter: We shall move as fast as we can. I am disappointed if some people are being charged rents above that war-rented by the condition of the houses. It is our intention not to increase rents on former private property until standards are improved.

Mr. Fitt: Is my hon. Friend aware that it is simply not true that the rents of Housing Executive dwellings are normally related to the condition of the properties? Thousands of Housing Executive tenants are living in deplorable conditions and paying the same rent as is paid for houses which do not need repairing.

Mr. Carter: If my hon. Friend has evidence, let him provide it. We hear a lot of hot words about housing matters in Northern Ireland, but rarely do we get the evidence. If my hon. Friend has it, let him provide it.

Mr. Biggs-Davison: On the second part of the original Question, may we be assured that a public inquiry will be held into the allegations first made in early


1976 by a number of us on the Conservative Benches, including my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) about mismanagement of contracts and excessive payments beneficial to the IRA in Andersonstown and elsewhere and to other para-military groups? We were at that time brushed off by the then Secretary of State. We had an announcement on Christmas Eve. We now want to be told that there will be a public inquiry and that it will speedily get down to work.

Mr. Carter: I had hoped to make a statement in the Northern Ireland Committee this morning about the investigation into the Northern Ireland Housing Executive but I was unable to do so. If it will suit the convenience of the House, I shall have the text of the statement placed in the Official Report. I have already placed copies of it in the Library.
My right hon. Friend has decided to appoint an Investigatory Commission with the following terms of reference:
To inquire in the light of allegations affecting the Northern Ireland Housing Executive into the placing and management of contracts and the payment of grants by the Northern Ireland Housing Executive.

Mrs. Knight: Since the police report on the allegations which I originally made about two and a half years ago was finally completed last March, will the hon. Gentleman now inject some urgency into the whole question? While he is doing so, will he also look at some of the practices of the Housing Executive—for instance, the directive that before tenants leave an old house they must completely wreck it?

Mr. Carter: I do not know whether the hon. Lady was listening to my statement, but I would have thought that it was a complete answer to the first part of her question.
As for the circumstances in which people leave houses and are transferred to other property, the Housing Executive has an excellent record on that. It may have defects elsewhere but on the humane treatment of tenants its record is second to none.

Rev. Ian Paisley: Is the inquiry to be a public, sworn inquiry? Will it have power to send for persons and papers, including former Ministers in the North-

ern Ireland Office who were, in consultation with the Housing Executive, engaged in the contracts which are now under scrutiny?

Mr. Carter: That will be a matter for the chairman, Judge Rowland, to decide. It is not for us to pre-empt the scope or depth of his inquiry, but we hope that everyone in Northern Ireland from the Government through to Members of Parliament and councillors, and anyone else dealing with housing, will give complete co-operation to the judge.

Following is the statement:

Statement on the Northern Ireland Housing Executive by the Under-Secretary of State for Northern Ireland (Mr. Ray Carter)
When, just before Christmas, the Chairman of the NIHE asked for an inquiry into various allegations which had been made about the affairs of the NIHE my right hon. Friend said that, while he agreed in principle to the desirability of an investigation he wished to consider carefully the form that it should take and the terms of reference.
My right hon. Friend has studied the nature of the allegations that have been made, the reports of the internal inquiries made by NIHE and a report which he called for from the Chief Constable on some of the police investigations.
In the light of this my right hon. Friend has decided that what is required is a thorough and detailed investigation into the way in which the NIHE has placed contracts and has controlled the work and payments made under them and also into the way in which payments are made by NIHE to private individuals—particularly in the form of improvement grants.
My right hon. Friend has therefore decided to appoint an Investigatory Commission with the following terms of reference:
To inquire in the light of allegations affecting the NINE into the placing and management of contracts and the payment of grants by the NIHE.
I am glad to say that, with the agreement of my Noble Friend, The Lord Chancellor, my Right Honourable Friend, the Secretary of State has invited his Honour, Judge Rowland, QC, to serve as Chairman and he has accepted.
Judge Rowland will be assisted by an accountant and a quantity surveyor. The latter has yet to be appointed but the accountant will be Mr. J. C. Nicholson, Member of the Chartered Institute of Public Finance and Accountancy, the district auditor for the metropolitan audit district.
The way in which the Commission proceeds with its business is entirely a matter for Judge Rowland and his colleagues. I can say, however, that, where the chairman is satisfied that, in the interests of justice, a witness ought to be represented by solicitor or counsel and


wishes to be so represented the reasonable costs of such representation will be borne from public funds.
I am sure that the board and staff of the NINE and all those engaged with them in relevant matters will co-operate fully with the Commission.

Republic of Ireland

Mr. Madden: asked the Secretary of State for Northern. Ireland when he next intends to meet Ministers from the Republic of Ireland.

Mr. Flannery: asked the Secretary of State for Northern Ireland if he has any plans to meet the Prime Minister of the Irish Republic.

The Secretary of State for Northern Ireland (Mr. Roy Mason): I look forward to further meetings with Ministers of the Irish Republic before too long, but I have no firm plans for such meetings at present.

Mr. Madden: When the Secretary of State meets Irish Ministers will he make clear that the Government have no truck with rumoured Tory policy proposals of withdrawing the franchise from citizens of the Irish Republic who have been resident in this country, in some cases for many years, and that we would be wholly opposed to any change of that sort?

Mr. Mason: I absolutely agree with my hon. Friend. I hope that this fact will be fully conveyed to the Irish authorities so that they may know where we stand. However, I am not responsible for what appears in the Press and for what other hon. Members may say.

Mr. Flannery: When my right hon. Friend eventually meets the Prime Minister of the Irish Republic, will he undertake to explore with him in some depth, if possible, the question of the change of policy from the previous Irish Government to the present in regard to the presence of British troops in Northern Ireland? In exploring that issue, will he, in particular, take into account the expressed view of both communities in Northern Ireland on this important matter?

Mr. Mason: Certainly the next time I meet the Prime Minister or the Foreign Secretary of the Republic I shall discuss such matters with him. Those matters are wholly relevant to the situation in Northern Ireland, but I have not yet

detected a major change of policy by the South on that issue.

Mr. Neave: Is the right hon. Gentleman aware that no such proposals with regard to Irish voting rights exist outside newspaper articles, and that no such statement has been made? Will he tell the Irish Government that raising the spectre of British withdrawal at the present time simply encourages subversion and terrorism in Northern Ireland? Will he protest against the reported denunciation by the Irish Foreign Minister, Mr. O'Kennedy, of the undertakings given at Sunningdale in 1973 with regard to the status of Northern Ireland in the United Kingdom?

Mr. Mason: That all depends on how wide the discussions roam once we meet. Raising the spectre of military withdrawal is bound to cause some turbulence in the North. That has been accepted, and the Taoiseach has been fully aware of that.

Mr. Powell: Without any disrespect to the right hon. Gentleman or criticism of him, would it not be appropriate that talks between Her Majesty's Government and the Government of the Irish Republic should normally take place under the aegis of the Foreign Office?

Mr. Mason: Yes, there are many matters that would primarily go through the Foreign Office to the Irish Republic. Most major matters would be carried on on that basis. I do not, however, want the House to believe that we do not have ministerial contact with the South. In the last six months my Ministers and I have met at least seven Ministers of the Fianna Fail Government.

Mr. Fitt: Does the Secretary of State agree that Sunningdale was brought to an end by the action of the strikers in May 1974 and that it is highly unrealistic to expect any partner to that agreement faithfully to fulfil that pledge? Will he say whether it is true that on Monday afternoon of this week a Diplomatic Note was sent by this Government to the Dublin Government regarding allegations of cross-border activity, and that the Government in Dublin have completely rejected the terms of that note?

Mr. Mason: I would have thought that most right hon. and hon. Members had learnt the 1974 lesson concerning


Sunningdale. That is one of our difficulties in trying to make political progress. As for the other matters, the information regarding the wider use of the Republic was conveyed to the Dublin authorities three months ago and before I made my speech on Monday. I hope that that sort of matter will now be pursued through the official channels.

Government

Mr. Molyneaux: asked the Secretary of State for Northern Ireland whether he will consider proposals for improving the machinery of the Government of Northern Ireland.

Mr. Mason: Various improvements have been made in the last two years to the machinery of government for Northern Ireland, but I am always willing to consider any proposals for further improvements.

Mr. Molyneaux: If the Government will not restore devolved government to Northern Ireland and will not reinstate effective local government, will the Secretary of State introduce improvements to the present processes for governing Northern Ireland and remove the defects, of which we have had two examples this week?

Mr. Mason: As the hon. Gentleman and the House know, my aim for Northern Ireland is a partnership Administration, and I am trying still to keep on that course. On improving the machinery of government, I am sure that the hon. Gentleman will recognise that we have increased time in the Northern Ireland Committee, we have extended debates on the Floor of the House, and we now have more Great Britain Bills applying to Northern Ireland. In addition, we have increased consultative time on draft orders. We are constantly making improvements.

Mr. Neave: Is the right hon. Gentleman aware that we accept in principle what the hon. Member for Antrim, South (Mr. Molyneaux) has just said, but that in the short term a new structure for local government and regional administration should be devised in Northern Ireland to make it more responsive to public opinion? In looking at improvements in the machinery of government,

will he ensure that his junior Ministers do not seek to impose domestic policies on questions such as education without adequate consultation?

Mr. Mason: I take the point made by the hon. Gentleman. My noble Friend who is responsible for education in Northern Ireland and I have gone to great lengths to make sure that there is proper consultation. We must not bow too quickly to very strong pressure groups. We have allowed them a great deal of leeway and latitude. However, proper consultation is taking place on the gradual changes in education in Northern Ireland.

Mr. Kilfedder: Does the right hon. Gentleman know that the Ulster people believe that he and the Government are treating Northern Ireland like some piece of colonial territory miles and miles away and that that belief is given substance to by the fact that last Monday we had a debate on security which, through some gentleman's agreement, was supposed to last for only four hours? That is disgraceful, when we also had a number of orders, including one on appropriation, which had to be dealt with in an hour and a half.

Mr. Mason: The hon. Gentleman is right in saying that the appropriate order took only an hour and a half, but that was because of the activities of the hon. Gentleman and his friends. There was an agreement for four hours' debate. The debate should have terminated at 8·15, but it went on until 10 o'clock. One of the reasons for that was the almost dishonourable behaviour of some of the hon. Gentlemen who participated in the debate. It is a good job that Ulstermen did not see the hon. Gentleman at work on that day.

Mr. Powell: Without wishing to render the excitement greater, may I ask whether the right hon. Gentleman agrees that in similar cases in future we shall have to consider carefully the utility of a business motion which would preserve a certain minimum length of time for an order as important as the Appropriation Act? In saying that, may I ask him to realise that I am making no criticism of the Administration for what happened on Monday?

Mr. Mason: That is a valid point. The right hon. Gentleman will realise that most of his hon. Friends were not fully conversant with the procedures of the House, and having taken the security debate to 10 o'clock they were depriving themselves of time to discuss the appropriation order. I hope that the right hon. Gentleman and his hon. Friends will appreciate that we did in the end allow a full day to discuss the question of security.

Armed Forces

Mr. Litterick: asked the Secretary of State for Northern Ireland how many armed men are currently deployed by her Majesty's Government in Northern Ireland, inclusive or armed auxiliary elements; and what were the numbers at the same time in each of the last eight years.

Mr. Concannon: At 1st March, 13 major units of the combat arms were deployed in support of the Royal Ulster Constabulary in. Northern Ireland, together with 11 battalions of the Ulster Defence Regiment.
I will, with permission, publish figures for the previous eight years in the Official Report.

Mr. Litterick: I am grateful for that somewhat sketchy answer, but is the Minister aware that the present war in Northern Ireland is the longest war in which British armed forces have been engaged for 162 years? Is he aware that the length of that war and the number of armed men so deployed after such a long time is a true indication of the failure of all the political initiatives so far tried? Therefore, will the Minister give some undertaking that his Department is at least prepared to consider alternative untried political options?

Mr. Concannon: If my hon. Friend could sketch these in a bit more I would appreciate it. The Government's long-term security strategy is based on developing the strength and capability of the police to the point at which they can discharge their duties without military assistance. While terrorism continues to pose a threat, and for as long as the overall situation demands it, there will be an Army presence at an appropriate level.

Mr. Michael McNair-Wilson: Does the Minister agree that the wording of the

Question is insulting to the memory of hundreds of soldiers and policemen who have given their lives so that the community in Northern Ireland shall live at peace in law and order?

Mr. Concannon: I should have thought that the Question was a straight one, although a bit sketchily put together.

Mr. Litterick: A bit sketchily answered.

Mr. Concannon: A sketchy Answer to a sketchy question. I would have thought that it was the supplementary questions that mattered.

Following is the information:

Figures for previous eight years referred to in answer

POSITION AT 1ST MARCH EACH YEAR


Regular Army (Major units of the combat arms)


1970
…
…
7


1971
…
…
9


1972
…
…
19


1973
…
…
19


1974
…
…
17


1975
…
…
15


1976
…
…
16


1977
…
…
14

General Election (Postal Votes)

Mr. Adley: asked the Secretary of State for Northern Ireland what conclusions he draws from the high level of votes cast by postal vote in the Mid-Ulster and the Fermanagh and South Tyrone parliamentary constituencies at the last General Election; and if he will make a statement.

Mr. Carter: I accept that the figures for postal voting in these two constituencies are abnormally high, but after consulting the Chief Electoral Officer I am satisfied that the rules on applications for postal votes are applied as rigorously in these two constituencies as they are elsewhere in the United Kingdom.

Mr. Adley: Is it not a fact that the average number of votes cast by postal


vote throughout the United Kingdom is under 3 per cent, and that the figure for Fermanagh and South Tyrone is over 14 per cent., and that the hon. Member's majority there is 4 per cent. and that this can sometimes have a decisive effect on a close vote in the House, such as that which took place on 8th November 1976?
Will the Minister invite the electoral officer, prior to polling at the next election, to have a particularly close check on the postal voting situation, perhaps taking random checks on the medical side of the postal vote applications?

Mr. Carter: It is always possible that all the postal votes went to the loser in the election rather than to my hon. Friend, but I am afraid that we do not know, because records have since been destroyed. [HON. MEMBERS: "Oh."] They always are. I would not have thought that that was any great news to anybody. If the hon. Member has any evidence to suggest that there was anything irregular in this case perhaps he will forward it to me.

Mr. Fitt: As one of the constituencies is represented by a Unionist and the other by a non-Unionist, is the hon. Member for Christchurch and Lymington (Mr. Adley) implying that each hon. Member was guilty of misconduct during the course of the election?

Mr. Carter: I did the hon. Member the credit of simply seeking hard evidence, which the hon. Member does not appear to have found up to now.

Mr. Powell: On the basis of the Minister's reply, and as overwhelmingly these postal votes are based on physical inability to go to the polls, do the Government intend to institute an investigation into the reasons for the catastrophically lower level of health in these two counties as compared with the rest of the Province? What steps should be taken to remedy it?

Mr. Carter: That is probably the right avenue down which to march, but the right hon. Gentleman is, as always, more careful than others in seeking out these powers. If there is some hard evidence to explain why these figures are higher

than those anywhere else, we are only too pleased and willing to look at them.

Security

Mr. Biggs-Davison: asked the Secretary of State for Northern Ireland whether he will make a statement about the present state of law and order.

Mr. Watkinson: asked the Secretary of State for Northern Ireland if he will make a statement on the security situation in Northern Ireland.

Mr. Kilfedder: asked the Secretary of State for Northern Ireland if he will make a statement on the security situation.

Mr. Jessel: asked the Secretary of State for Northern Ireland if he will make a statement on the security situation in Northern Ireland.

Mr. Goodhart: asked the Secretary of State for Northern Ireland, if he will make a further statement about the security situation.

Mr. Mason: Since the blast bomb outrage at the La Mon House restaurant on 17th February, terrorist activity has centred on attacks on members of the security forces, nine of whom have been killed so far this year.
The security forces maintain their drive to inhibit terrorist operations on the ground and to bring before the courts those responsible for criminal acts. Already this year the police have charged 177 people with terrorist offences, including seven with murder, 12 with attempted murder, 48 with firearms offences and 32 with explosives offences. Finds by the security forces include 51 weapons, over 6,000 rounds of ammunition and over 100 lbs. of explosives.

Mr. Biggs-Davison: In view of the public and Press conjecture that the Portadown murderers might start a new series of sectarian atrocities, should not all those with influence in the Province encourage the brave and patient people of the Province in their steady stand over these years against reprisals, which are what the Provisional IRA wants to provoke?
Will the Secretary of State be reporting to the House—without disclosing information that might be useful to terrorists—the result of his continued review of security in this new phase of the troubles?

Mr. Mason: If the hon. Gentleman does not mind my saying so, I seem to have plenty of opportunities to report to the House on how we gradually intensify or change the tactics within our security strategy. There is opportunity at Question Time, and during security debates. I agree that it is essential now to appeal to the people of Northern Ireland to cooperate with the RUC. We should warn people of the dangers of a backlash—just exactly what the Provisional IRA is hoping for—because in the wake of that backlash they may rise again to try to prove that they are the protectors of the minority.

Mr. Watkinson: Does my right hon. Friend agree that if the Prime Minister of the South is sincere in his desire to see the Provisional IRA defeated, the greatest assistance to that aim could be given by accepting the European Convention on the Suppression of Terrorism and also by encouraging every development of co-operation between the RUC and the Garda?

Mr. Mason: The co-operation on the border between the RUC and the Garda is good, and I hope that we can build on that in the wider operations of attacking the Provisional IRA or, indeed, any other terrorist activity both in the North and in the South. My right hon. Friend the Foreign and Commonwealth Secretary and Her Majesty's Government have let the Republic know how worried they are that the Republic is not prepared to move forward on the convention on the suppression of terrorism.

Mr. Kilfedder: With regard to security in the Province, the right hon. Gentleman is aware of the urgent demand that I made that he should hold up the signing of the contract with the American firm of Rapid Data for the production of 500 new driving licences in Northern Ireland at a cost of almost £250,000, because—

Mr. Speaker: Order. I am sorry to interrupt the hon. Gentleman, but he must come to the point and ask a question.

Mr. Kilfedder: Will the Secretary of State give the House an assurance that that contract will not be signed, in view of the colossal amount of money involved, until he can assure the House that it is not a gift to the terrorists, who can alter the proposed driving licence, who can easily tamper with it, and use it as a means of identification?

Mr. Mason: I am sorry, but I do not appreciate the close relationship of that question to questions of security.

Mr. Jessel: Is there any restriction on the use of the Special Air Service?

Mr. Mason: There is no restriction on the use of the Special Air Service. It is under the command of the general officer commanding the forces in Northern Ireland. Like all the security forces, of course, they must not act beyond the law.

Mr. Goodhart: Does the right hon. Gentleman recognise that the quality of co-operation between the RUC and the Garda across the border varies from area to area and that the disparity between areas seems to be growing? Does he recognise that the best way to put that right would be to have ministerial talks?

Mr. Mason: I have no evidence to prove that there is a slackening of the co-operation between the RUC and the Garda on any part of the border. If the hon. Gentleman has such evidence, I shall be pleased to look at it. There is no doubt that as soon as we can find convenient dates ministerial talks will take place.

Mr. McNamara: Is my right hon. Friend aware that all hon. Members will be pleased by the continuous praise that he has given on the question of cooperation on both sides of the border between the RUC and the Garda Siochana. Does my right hon. Friend think that at some time after Easter he could set about arranging ministerial talks so that some of the problems of definition that have arisen over the past few days, with the raising of tempers—which cannot be good for anybody—can be cooled down and matters sorted out sensibly?

Mr. Mason: I heed my hon. Friend's wise words. Ministerial talks may take


place after Easter. It entirely depends on the convenience of Ministers and how quickly we can get together. Although no ministerial talks may have taken place on the security front, officials have been working together on cross-border economic co-operation, and there is the likelihood of a ministerial meeting on that.

Mr. Mates: Is the right hon. Gentleman aware that, contrary to what the hon. Member for Down, North (Mr. Kilfedder) said, the introduction of a new form of driving licence is to be warmly welcomed for security reasons, and that the Government are to be congratulated on making use of the most up-to-date technology so that a document can be produced that is virtually tamper-proof?

Mr. Kilfedder: Let us put it to the test.

Mr. Mason: I am much obliged to the hon. Member for Petersfield (Mr. Mates) for giving a better reply than I could to the hon. Member for Down, North (Mr. Kilfedder). Clearly, the hon. Gentleman knows much more detail than I do about the matter.

Mr. Carson: Is the right hon. Gentleman aware that in my constituency recently the Army saw terrorists planting a bomb in Duncairn Gardens, but because of the yellow card restrictions the Army was unable to take the necessary action to deal with the terrorists? Will he give an assurance today that steps will be taken to preserve the lives of soldiers in Northern Ireland, in that the yellow card restrictions will be lifted and they will be allowed to deal with the terrorists in the proper way?

Mr. Mason: I hope that the hon. Gentleman is not advocating the abolition of the yellow card system in Northern Ireland. The soldiers, too, must be worried lest they kill innocent people in Northern Ireland. That is why we must have that sort of restriction.

Local Government

Mr. Gow: asked the Secretary of State for Northern Ireland what proposals he has for improving the quality and public accountability of local government in Northern Ireland; and if he will make a statement.

Mr. Carter: The 26 district councils in Northern Ireland are already accountable to their electorates for the way in which they carry out their duties. The quality of the services which they provide is a matter on which their electorates can pass judgment.

Mr. Gow: How can it be right to insist on the continuation of a system—or perhaps, more accurately, a nonsystem—of local government for Northern Ireland which the Government would not dream of accepting in any other part of the United Kingdom? Is it not wholly consistent with the Government's overall strategy for the constitutional future of the Province to fill, and fill urgently, the Macrory gap?

Mr. Carter: That is what the political talks were about earlier this year, until they broke down. The sooner we can have in Northern Ireland some form of devolved Administration, the sooner the hon. Gentleman's question will be answered.

Area Boards

Mr. Michael McNair-Wilson: asked the Secretary of State for Northern Ireland if he is satisfied with the make-up and working of the area boards.

Mr. Mason: Yes, Sir, though I should prefer to see them answerable to a locally elected Administration established on a basis acceptable to both parts of the community. This could be achieved within the framework which I have put to the parties in Northern Ireland.

Mr. McNair-Wilson: Does the right hon. Gentleman agree that the area boards provide the ideal administrative structure for such a development? May I suggest that it is high time we had a more democratic representation?

Mr. Mason: I suppose that the hon. Gentleman is aware that Sir Patrick Macrory was responsible for the establishment of the boards. They have been going for only about four years. They are representative of varying interests and are not democratically representative of local authorities. Generally speaking, the make-up of a board is 30 per cent. nominated by the district councils, 30 per cent. representing professional interests and 40 per cent. representing other


interests, such as trade unions, universities and industry. Therefore, it can be seen that on the whole they are representing interests. They are keen to do the job, and so far we have not found maladministration.

Mr. Bradford: Will the right hon. Gentleman confirm that the members of the area education boards are not agents of the Department of Education? Will he also confirm that they are free to make an independent assessment of the proposed changes in the education system? If the area boards decide to scrap that system, will he accept their decision?

Mr. Mason: The area boards have been involved in the discussions on the evolution of education in Northern Ireland, but they are agents of the Department of Health and Social Security. They do not raise money by themselves. It must be afforded by the ratepayers.

Short Brothers Limited

Mr. Craig: asked the Secretary of State for Northern Ireland if he will make a statement on the future prospects of Short Brothers Limited; and, in particular, whether the five-year rolling programme submitted by the firm to the Government has 1heir full approval and support.

Mr. Concannon: The future prospects of Short Brothers will depend largely on the company's ability to achieve the production targets and to market its products successfully. Recent surveys of the market prospects for the SD5–50 wide-bodied commuter aircraft are encouraging and the achievement of satisfactory output of this aircraft will be a vital factor for the company's future success.
The five-year corporate plan to which the hon. Member refers is now receiving urgent consideration. When study of the proposals has been completed, there will be discussions between Government and the company and the House will be advised on the outcome.

Mr. Craig: I thank the right hon. Gentleman for his reply. Will he take on board a feeling on the factory floor that the wheels of Government seem to move

too slowly on occasions and that because of the nature of this rolling programme the workers and management would like to have an expeditious reply?

Mr. Concannon: I understand that the management has discussed the matter with the trade unions and the work force within the company, but Government assistance will be necessary when we have got down to the matter. I must examine it very carefully, but I shall do it as speedily as I can, having at the back of my mind what the Opposition are always willing me to do, which is to look after the public purse as well.

Fuel Policy

Mr. Skinner: asked the Secretary of State for Northern Ireland whether he is planning any change of policy regarding the use of other fuels in place of coal in Northern Ireland.

Mr. Concannon: No, Sir.

Mr. Skinner: Will my right hon. Friend confirm that the Northern Ireland coal mine is one of the best, per head of population, in the whole of the United Kingdom, and one of the few things that unite the Protestants and Catholics, in that coal is burnt right across the political divide? Will my right hon. Friend also confirm that the gas pipeline that would be necessary if gas were brought in—and it seems to me that discussions are taking place at certain levels—would cost millions of pounds? It is a shortsighted policy when probably there are only 20 years' reserves of gas compared with centuries of coal availability.

Mr. Concannon: I know that my hon. Friend's geographical knowledge of the coal industry is very wide, but on my travels around Northern Ireland—and I have been there some while—I have not yet seen a pithead, though I keep looking for one. There is under consideration a study of the case for gas in Northern Ireland, which has no link with North Sea gas. That is one of the problems over there. That study has been put to me. The coal that we use in Northern Ireland is only about 1 per cent. of the total coal production in Great Britain. Last year there was an increase of over 13 per cent. in the coal take in Northern Ireland.

Mr. McCusker: Will the Minister tell his hon. Friend the Member for Bolsover (Mr. Skinner) that those who are trying to bring natural gas to Northern Ireland are simply trying to give a cheaper fuel to the hard pressed, under-privileged people of Northern Ireland who are currently paying three times as much for their gas as are other parts of Great Britain, which have recently been told that the price of gas will remain static for the next 14 months?

Mr. Concannon: Had notice been taken of people like my hon. Friend the Member for Bolsover (Mr. Skinner), my right hon. Friend and myself 10 years ago I do not think that we would be in the situation that we are today with regard to the coal industry. In Northern Ireland terms it is the complete imbalance of fuel which is responsible for the situation as it is today.

Mr. Albert Roberts: Will my right hon. Friend bear in mind that in the next two or three years coal may well be cheaper than gas, taking capital expenditure into consideration? In view of the increasing amount of production at present, and the tremendous amount of stocks of coal that we possess, it may well be a more economic proposition to have coal transported to Northern Ireland rather than natural gas.

Mr. Concannon: I think that this is the first time in history that we have had a couple of old colliers looking after Northern Ireland. What has been said will be taken into consideration.

Political Parties (Talks)

Mr. Canavan: asked the Secretary of State for Northern Ireland whether he will make a further statement about the progress of his talks with political leaders in Northern Ireland.

Mr. Mason: Progress depends on the willingness of the parties in Northern Ireland to make it. It is unrealistic to expect quick results. What is needed is patience, tolerance and freedom from the glare of publicity.

Mr. Canavan: Bearing in mind that most people of various political complexions are utterly sickened at the recent re-emergence of violence in Northern Ireland, is it not now time for the Government themselves to take some political

initiative? The only suggestions that we seem to hear from Opposition Members are demands for capital punishment and internment, which would simply help the terrorists recruit more people.

Mr. Mason: I entirely agree with my hon. Friend's latter remarks. The difficulty with taking initiatives in Northern Ireland is the number of factions in the political parties and their religious bases, which would cause them to split asunder with no chance of making progress. If we are to find a solution it will have to come from the political parties within the Province, and the framework is designed to achieve that.

Border Incidents

Mr. Marten: asked the Secretary of State for Northern Ireland if he will make a statement on frontier incidents in Northern Ireland.

Mr. Mason: There have been no incidents between British and Irish forces, although there have, in the course of the past eight years, been a number of occasions on which our forces, or those of the Irish Republic, have accidentally crossed the border. So far as terrorism is concerned, as I told the House on 6th March, co-operation between the two police forces is good, but the border remains an ingredient in much of the terrorist violence in both North and South.

Mr. Marten: In view of the incredibly fine spirit of the great majority of United Kingdom citizens in Ulster in defiance of the IRA, is the right hon. Gentleman really satisfied that we are getting full and genuine co-operation between the Army and the Republic in the fight against the IRA?

Mr. Mason: During the time that I have been Secretary of State for Northern Ireland the Army of the South has been giving greater co-operation than previously. Although there is good RUC-Garda co-operation, it is not easy to have British Army-Irish Army co-operation in respect of some of the frontier incidents.

Mr. Litterick: Has my right hon. Friend's Department given any serious thought to the possibility that shifting the border might diminish cross-border violence?

Mr. Mason: I would hate to have the task of shifting 300 miles of border.

Mr. Biggs-Davison: Has the Secretary of State any further information on how the M60 machine gun was introduced into the Province? Can he tell us on which side of the border or where training in the use of this weapon is taking place?

Mr. Mason: I cannot give any further information to the House. As I said earlier, there is no reason why this matter should not be discussed officially. One man has been charged and is being held in connection with the M60 machine gun during the exhibition in January.

Mr. McCusker: Is the right hon. Gentleman aware that despite what he said on Monday evening and again this afternoon, the Minister for Foreign Affairs of the Republic said yesterday that there was not a shred of evidence to support the assertion that he is making? What will he do to convince the authorities in Dublin of what is happening along the border?

Mr. Mason: It is quite clear that 2 per cent. of border incidents are consistently mentioned. That represents only those incidents which are indisputably cross-border because commanding officers or eye witnesses have seen attacks being carried out from over the border in the Republic. That is the definition of the 2 per cent.

Oral Answers to Questions — PRIME MINISTER (ENGAGEMENTS)

Mr. McCrindle: asked the Prime Minister if he will state his public engagements for 9th March.

The Prime Minister (Mr. James Callaghan): This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others, including one with the Deputy Prime Minister of New Zealand.

Mr. McCrindle: Has the Prime Minister had time to investigate reports of phone tapping and censorship of telephone calls between doctors and patients in pursuit of an industrial dispute? If those reports prove to be accurate, will

the Prime Minister be prepared to condemn this practice in the most unequivocal terms?

The Prime Minister: I am glad that the hon. Gentleman said "If these reports prove to be accurate". Obviously, anything I say is based on the reports being proved to be accurate. I would wholeheartedly and without any equivocation condemn telephonists working in any hospital who hold up communications between the public outside and the hospital inside.

Mr. Kilroy-Silk: Is my right hon. Friend aware that the Bird's Eye factory in Kirkby has dismissed 1,200 of its workers and refused to pay any redundancy pay? Given that my right hon. Friend has said that sanctions are applied against companies in order to protect jobs and maintain employment, will he give an assurance that not a penny of Government aid or assistance will go to the Bird's Eye factory or to Unilever until it stops bullying workers and settles the dispute through the normal procedures in an honourable fashion?

The Prime Minister: It so happens that before I came into the House I was looking into this matter. I am therefore able to say rather unusually that I am aware of the facts. [HON. MEMBERS: "Oh."] I was only lucky, because I was not to know what the Question would be about. As I understand it, 112 men went on strike on 28th November last because they would not accept an offer of 10 per cent. plus £5 bonus. That strike has persisted ever since and, at any rate, is the proximate cause of the present problem. I know that ACAS endeavoured as long ago as the beginning of January to intervene to try to get a settlement. It has not been able to intervene in the matter and I would say to my hon. Friend that on the present evidence I would not think it at all right for anyone to withdraw support from the firm.

Mrs. Thatcher: As there seems to be confusion about the reason why the Foreign Secretary has returned from the debate on Rhodesia, may I ask the Prime Minister to give the latest news and, in particular, to assure the House that the Foreign Secretary is doing everything in his power to bring an internal agreement to fulfilment?

The Prime Minister: My right hon. Friend went at the invitation of Mr. Vance and met President Carter. He also had the intention, if the Security Council debate had taken a relatively short time, to speak in that debate. But I understand that that debate is now likely to be extended for several days. [HON. MEMBERS: "He would not be called."] He would be called, because we supply the chairman. That is exactly the point. It is the custom for the chairman to speak last. Therefore, he might not have been able to call himself until some time next week. He therefore thought it appropriate, having concluded his business, to return here. If necessary he will go back again.
With regard to the nature of the internal settlement, I do not go along with the right hon. Lady. I think that the position that the Foreign Secretary has taken is absolutely right, and we must defend that position not only against Opposition Members who take a different view but also against African States who wish us to go in an entirely reverse way. We will not veto the arrangement entered into. Nor is it our responsibility to endorse it until we see how it is carried out. In the meantime, it is our responsibility to try to extend the area of agreement in order to bring in those who are low outside. If we do not, this new State, If it is born, will be born in a period and area of conflagration and the war will go on. It is the path of statesmanship to interest people like Mr. Nkomo and Mr. Mugabe in the settlement before it is finally agreed.

Mrs. Thatcher: Is the Prime Minister aware that we accept that it would best for Mr. Nkomo and Mr. Mugabe to be involved in the settlement? Is he further aware that many of us feel that the internal settlement is the best hope of peace in Rhodesia that we have had for a long time? If the momentum in supporting it is lost, the situation may deteriorate into one in which it will be votes against guns, and then all hope of a peaceful settlement will be lost. It is very important to see which of the Six Principles has not been accepted. As far as I am aware, the only one at issue is the Fifth Principle. Surely it is not beyond the wit of either the interim Government or this Government to devise a test of internal acceptability of the

internal settlement. Once that is done, the way is open for a number of other things to follow.

The Prime Minister: I am grateful to the right hon. Lady for saying—I do not know whether this is the first time that it has been said officially by the Opposition—that Mr. Nkomo and Mr. Mugabe should be involved. That means the involvement of the Patriotic Front and the guerrilla forces in a final settlement. It is important that it should go out from this House to Rhodesia that both sides want the Patriotic Front involved in a settlement. As the right hon. Member for Knutsford (Mr. Davies) is saying to me, the Patriotic Front has no right of veto—none at all. We have made this very clear to both Mr. Mugabe and Mr. Nkomo. I agree that the steps that Mr. Smith has taken would have been inconceivable two years ago, more is the pity. But he has taken them, and that has taken us a long way further. Having got to that position it is in the interests of both sides and this country to try to stop the war, and to get people outside, who are not now involved, involved in the settlement. Our efforts are bent on creating a wider area of agreement—getting Mr. Nkomo and Mr. Mugabe in—and providing machinery to enable us to do that. I assure the Leader of the Opposition that we are working on both these things.

Mrs. Thatcher: rose—

Mr. Faulds: On a point of order, Mr. Speaker—

Mr. Speaker: Order. I shall take points of order after Question Time. It is quite traditional to give an extra little bit of privilege to the Leader of the Opposition.

Mrs. Thatcher: rose—

Hon. Members: No.

Mr. Speaker: Order. I am not taking any points of order until the end of Question Time.

Mrs. Thatcher: I wish to make one point very briefly. Is the Prime Minister aware that the gun must not act as a veto to the internal settlement? It is the decision on votes that is more important.

The Prime Minister: With respect, I doubt whether a simple slogan will solve the problem. At present the gun is determining a great deal of the events in


Rhodesia, including the response by the regime to the present situation. It must be our task not to talk of guns or votes but to create a situation in which votes can be freely cast. In many areas of Rhodesia, I doubt whether votes could be cast freely even if an election were held. That is a difficulty that we must overcome. It is our task to work for a settlement within the Six Principles, and we are doing so.

Later—

Mr. Faulds: On a point of order, Mr. Speaker. I observed the Prime Minister's request not to pursue this matter during Prime Minister's Question Time because he is so good during that period. I intend to pursue the matter now, Sir.
You mentioned a little earlier the "little bit of privilege" accorded to Leaders of the Opposition. We all accept that, because it is an old-established custom of the House, but is it not within your discretion to refuse that privilege when it is so grossly abused, as it is by the present Leader of the Opposition with her persistent three bites at every cherry?

Mr. Speaker: I have been in this House a good deal longer than the hon. Gentleman and I have known Leaders of the Opposition from both major parties who have felt it necessary, in the interests of their side of the House, to pursue questions. There is nothing new in that.

Mr. Norman Atkinson: Further to that point of order, Mr. Speaker. Has it not become the practice in recent years for Prime Minister's Question Time to be the equivalent of a presidential Press conference? If that is the case, and in view of the fact that Prime Minister's Question Time will be broadcast immediately after Easter, could not the Leader of the Opposition, if she so chooses, come up with four, five, six or even seven supplementary questions and therefore dominate the whole—[HON. MEMBERS: "Oh."]—and so occupy most of Prime Minister's Question Time that eventually it will become a party political broadcast?

Mr. Speaker: May I make an appeal to the House? I shall be in great difficulty later, when the major debate takes place, because of the large number of Members who wish to take part. Therefore, I hope that we can move on.

Oral Answers to Questions — ADLINGTON

Mr. George Rodgers: asked the Prime Minister if he will pay a visit to Adlington.

The Prime Minister: I have at present no plans to do so.

Mr. Rodgers: Is the Prime Minister aware that if he visits Adlington, he will find it a very attractive village, set in the heart of Lancashire? Is he aware that the prosperity of this nation was created in such areas by labour-intensive industries, such as textiles and coal mining? Is he also aware that it is unlikely that manufacturing industry will in future recruit labour on this scale? Therefore will he ask the public sector, including the education and hospital services, to provide job opportunities? Will he utilise the revenues from North Sea oil to implement a full Socialist policy?

The Prime Minister: We have had exchanges about this matter at Question Time before. There is no doubt that manufacturing industry finds that its rationalisation sometimes involves some slimming of jobs and not adding to them. My hon. Friend wrote to me about the success of the Leyland Bus and Truck Company in his constituency. This has a sound manufacturing base, and manufacturing investment is important for exports, as this company has demonstrated. Also, there must be a balance between private and public sector expenditure. I find more and more often outside this House, and away from the asperities that divide us, that the crude old argument about the division between public and private expenditure no longer exists when this matter is discussed by people in industry.

Mr. Grylls: If the Prime Minister changes his mind and does go to Adlington, will he tell the people there which of his achievements he is most proud? Is it the fact that prices have risen by nearly 90 per cent. in the past four years, or is it the fact that production has risen no more than it did in 1973?

The Prime Minister: I believe that due humility is becoming in every walk of life. I am well known for it. If I had to work out what was important I would advance as a very good claim the fact that when the Conservatives left office


the retail price index was steadily going up and was forecast to go up further. Now it is coming down, and it will continue to come down.

Mr. Gould: Has the Prime Minister seen today's reports of a warning by the Chairman of ICI of the damage done to British industry by the overvalued pound? If the Treasury persists in ignoring all the evidence provided by our unemployment, output and trade figures and by all statistical indicators and common sense, will the Prime Minister ensure that before we go too far down this blind alley he encourages the Treasury to listen to what is being said by the leader of our biggest industrial company?

The Prime Minister: My hon. Friend need have no fears about my listening. I always listen, and I read all the letters that he sends me. They are very well informed, as well as being rather lengthy. When he becomes the Chancellor of the Exchequer, as no doubt he will, one day, he will find that it is easier to talk about moving the pound up or down than it is to achieve that. Sometimes it is not as easy as he thinks.

Mr. Montgomery: If the Prime Minister visits the North-West, will he make a detour and go to see the Bishops of Lichfield and Ripon and read them page 326 of the Crossman Diaries, where he is quoted as saying:
No more bloody immigrants, whatever happens"?
Does the Prime Minister agree that that is the sort of language that one would expect from a recruiting officer for the National Front?

The Prime Minister: I must confess that I have not read the Crossman Diaries. I was afraid of what I might find. If I were to speak to the two bishops, I would point out that probably their statements were justified, especially when I look at figures for immigration that were published yesterday. These show that there was a substantial reduction of immigration from the New Commonwealth, without infringing any of the undertakings or obligations that we made in the past.

Later—

Mr. Burden: On a point of order, Mr. Speaker. Everybody but the Prime

Minister knows that the retail price index is not coming down. Will it be in order for him to make the situation clear?

Mr. Speaker: I think that we are wasting time.

The Prime Minister: I am grateful to the hon. Gentleman for making that point, because as soon as I said it I realised that it was not what I wanted to say. The hon. Gentleman knows what I wanted to say, and that was to refer to the rate of inflation and not the retail price index. It is the rate of inflation that is falling.

BUSINESS OF THE HOUSE

Mrs. Thatcher: May I ask the Lord President to state the business of the House for the period up to Easter?

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for the period up to the Easter Adjournment will be as follows:

MONDAY 13th March and TUESDAY 14th March—Debate on a motion on the Statement on the Defence Estimates, Command No. 7099.

At the end on Monday, proceedings on the Commonwealth Development Corporation Bill [Lords], the Northern Ireland (Emergency Provisions) Bill [Lords], and on the Refuse Disposal (Amenity) Bill [Lords], which are consolidation Measures.

Motion relating to the Fiduciary Note Issue (Extension of Period) Order.

At the end on Tuesday, motion on the Industrial Training Levy (Engineering) Order.

WEDNESDAY 15th March—Second Reading of the Trustee Savings Banks Bill.

Remaining stages of the Employment Subsidies Bill and of the Local Government (Scotland) Bill [Lords].

Motion on the Prevention of Terrorism (Temporary Provisions) Act 1976 (Continuance) Order.

THURSDAY 16th March—Debate on the White Paper, "The Government's Expenditure Plans, 1978–79 to 1981–82", Command No. 7049, when the Second


Report from the Expenditure Committee will be relevant.

Motion on EEC Documents Com(77) 620, R/2355/77 and R/415/78 on Economic and Monetary Union and National Economic Policies.

FRIDAY 17th March—Private Members' motions.

MONDAY 20th March—Proceedings on the Consolidated Fund Bill.

TUESDAY 21st March—Motion on EEC Documents R/3200/77, R/3200 Addendum 1, and R/545/78, on Agriculture Price Proposals, and R/27/78 on Milk. Other relevant EEC documents will be listed in the Official Report.

Motion on EEC Documents R/3197/ 77 and R/3197 Addendum 1, R/ 3270/77 and R/402/78 on Mediterranean Agriculture and Wine.

WEDNESDAY 22nd March—Debate on the Windscale Inquiry Report.

Motion on EEC Document S/2066/77 on Cyprus.

THURSDAY 23rd March—It will be proposed that the House should meet at 11 a.m., take Questions until 12 noon, and rise for the Easter Adjournment at 5 p.m. until Monday 3rd April 1978.

Following are the EEC Documents relevant to the debate on Tuesday 21st March 1978—

R/3295/77—Financial implications of the price proposals.
R/3296/77–1977 report on the agricultural market situation.
R/863/77—UK butter subsidy and isoglucose levy (dating from last year's price fixing).
R/1969/77—Production refunds for starch.
R/2291/77 and R/2292/77—A report on beef support arrangements (intervention, private storage and slaughter premiums).
R/2648/77—Use of funds deriving from the milk co-responsibility levy.
R/389/78—MCA report.

Mrs. Thatcher: May I put two points to the right hon. Gentleman? First, I see that no provision is made for a foreign affairs debate before Easter. Is he aware that many of us feel that we may at least want a debate on Rhodesia before the House adjourns for the Easter Recess? Therefore, in the light of events, will he examine the prospect of the House being able to debate the subject of Rhodesia before that time arrives?
Secondly, the right hon. Gentleman said that the House will debate the White Paper on defence on Monday and Tuesday on a Government motion. Since in these days such motions tend not to be straightforward, may we know when the motion will be tabled?

Mr. Foot: I cannot promise a debate on foreign affairs and Rhodesia. I am happy to have discussions about the matter, but I repeat that I can give no promise. If such a debate were to take place, it would cause great difficulties in the programme of business which I have already announced, but that no doubt will depend on events.
On the second matter relating to motions, I would inform the right hon. Lady that motions are sometimes altered. She will know from her Biblical knowledge that motions can sometimes be in the form of an authorised version or a revised version, but either version would be better than the motion the right hon. Lady has on the Order Paper. I hope that she will be satisfied in that respect, and I also hope that we shall table the motion in good time for the House to be able to take account of it.

Mr. Spearing: May I ask my right hon. Friend about the debate on Wind-scale on Wednesday week? Will my right hon. Friend consider tabling a take-note motion on the subject so that the various forms of opinion can be placed on the Order Paper rather than that the matter should be dealt with on the Adjournment, which will not allow such a right to be given to hon. Members?

Mr. Foot: I believe that a debate on the Adjournment would be more convenient than the method suggested by my hon. Friend, because a take-note motion may not give rise to the same possibilities as will the method we suggest. I think that we should proceed in the way we are recommending.

Mr. Molyneux: Will the right hon. Gentleman tell the House when we may expect to debate the motion on the Easter Adjournment?

Mr. Foot: I think that that will take place on the Monday.

Mr. Heifer: Is there any possibility of a debate on the problems of the North-West, with particular reference to unemployment problems on Merseyside?


Could such a debate take place, not as part of an Adjournment motion but as a full-scale debate, so that some positive policies may be advanced to deal with the serious problems which those on Merseyside are now facing?

Mr. Foot: I fully accept everything my hon. Friend says about the seriousness of those problems. He will know that many other Merseyside Labour Members have mentioned this matter on previous occasions. I cannot promise a special debate on the subject. I can only point out that these matters often enter into general economic debates of the type we shall be having. In considering whether we shall consider some of these matters after the Easter Recess, I wish to inform my hon. Friend that I shall examine the position in the light of the comments which he and others have made.

Mr. Farr: Will the right hon. Gentleman explain the reasons lying behind the events in Committee Room No. 14 this morning when the Northern Ireland Committee met to consider the reorganisation of the Housing Executive? Members found themselves in a Committee room that was totally devoid of documentation, and they discovered that there was no documentation on the matters at hand within the precincts of the Palace of Westminster. In view of the fact that the Committee had to adjourn until documentation was found, will he examine the matter and acknowledge that he is responsible for seeing that Members of Parliament are furnished with such documents in a proper manner?

Mr. Foot: I shall look into the matter, of course. As I understand it, the documents that were available were the normal sort of documents that are available in these circumstances. I shall look into what occurred this morning.

Mr. Cant: Has my right hon. Friend's attention been drawn to Early-Day Motion No. 286 on the City "watchdog"? Is he aware that many of his hon. Friends are rather annoyed that the Bank of England has taken 18 months to make a report on this issue, and that it seems as though the Government will make up their mind without reference to Members of Parliament, many of whom are very dissatisfied?

[That this House would have no confidence in a Council for the Securities Industry consisting entirely of representatives of City institutions with no legal powers and no responsibility for other parts of the financial services industry.]

Mr. Foot: I shall take into account the question that my hon. Friend has raised along with those of my hon. Friends who signed the motion on the Order Paper. The Government will take into account these representations along with others.

Mr. Crouch: I believe that the right hon. Gentleman said that there would be a debate on wine on Tuesday week. What is the nature of the wine that we are to debate? I do not think that the matter has yet been debated in the plenary session of the European Parliament. Will the right hon. Gentleman enlighten us on what we are to be asked to decide about the wine that we are to use in this country?

Mr. Foot: If the hon. Gentleman looks at the documents to which I have referred, he will see the reference to wine as well as to agriculture generally.

Mr. Ted Fletcher: Will my right hon. Friend indicate when he intends to introduce the electricity Bill?

Mr. Foot: We should like to introduce the whole Bill, but I cannot indicate to the House when we shall be able to do so. The sooner that we can do it, the better.

Mr. Hodgson: When does the Lord President intend to bring forward legislation based on the Briggs Report on the future of nursing? Is he aware that delay is causing considerable concern to the profession?

Mr. Foot: I acknowledge the importance of the Briggs Report and the desire of hon. Members in many parts of the House that we should proceed with it. I cannot give any indication that we shall be adding to our legislative programme at present.

Mr. Molloy: Is my right hon. Friend aware that earlier this week during Questions to the Secretary of State for Social Services many Opposition Members, notwithstanding the policy of their Leader, made demands on behalf of their constituents and constituencies for great increases in public expenditure on hospital


building and all sorts or expenditure that we on this side advocate? Does my right hon. Friend agree that, because of the almost total unanimity of the House of Commons to have an increase in this aspect of public expenditure, with the exception of the Leader of the Opposition, we should have a debate on the subject? That would not only help the National Health Service but would make a contribution to assist the construction industry, as well as making the will of the House of Commons a reality.

Mr. Foot: I suppose that it is conceivable but not probable that the official Opposition's policy on public expenditure might creep into the debate next Thursday.

Mr. Gow: Will the Lord President make a statement on behalf of the Government on their response to the recommendations of the Speaker's Conference for increased representation for Northern Ireland in the House?

Mr. Foot: I agree that a statement should be made to the House at an early date, and we shall see that it is done.

Mr. Canavan: May we have a debate on land policy in view of the report in today's Daily Record that the Tory-controlled Grampian regional council has given the use rent-free of several acres of public land to one of its local wealthy farmers—namely, the hon. Member for Banff (Mr. Watt), who has not declared this gift in the register of interests?

Mr. Foot: I cannot promise any debate. I am quite happy to leave the council concerned, and the hon. Member for Banff (Mr. Watt), to the not-so-tender mercies of my hon. Friend.

Mr. Rifkind: Does the right hon. Gentleman agree that it would be extraordinary if the United Nations were to consider the internal settlement in Rhodesia while Britain, which remains legally responsible, has no debate on the subject?
Secondly, when may we expect publication of the Criminal Justice (Scotland) Bill?

Mr. Foot: On the first subject, I have nothing to add to what I said in reply to the right hon. Lady the Leader of the Opposition. I think that the House should

take into account the statement made by the Prime Minister.
I do not have anything further to say on the Criminal Justice (Scotland) Bill. There is some legislation that we should like to get through that we shall have to postpone until the next Session. No doubt we shall have an almost equally full Queen's Speech at the beginning of the next Session as we had this Session.

Mr. Raphael Tuck: As my right hon. Friend will be aware, many of us are a little apprehensive at the recent announcement that the Government propose to have talks with Spain on the future of Gibraltar. Is my right hon. Friend able to give us any indication when we shall be able to discuss this vital issue?

Mr. Foot: I have nothing to say on the general subject. No statement has been made by the Government about it.

Mr. George Gardiner: In view of some contradiction between the statements made on Tuesday by the Secretary of State for Social Services and his predecessor on the question of files passing from that Department to the office of the former Prime Minister, will the right hon. Gentleman arrange for his right hon. Friend to make a full statement to the House next week to clear up the whole matter?

Mr. Foot: That would be a waste of time for the House. I think that the hon. Gentleman's question was a waste of time, too.

Mr. Spriggs: Will my right hon. Friend consult our right hon. Friend the Prime Minister with the object of his chairing a conference in the Merseyside area to consider the proposed redundancies—they have not taken effect yet—that will aggravate one of the worst unemployment situations in the United Kingdom?

Mr. Foot: I fully accept what all my hon. Friends from the Merseyside area say about the the extremely serious situation with which they are faced. I am not minimising it in any sense. However, whether the best way to proceed is to take the course recommended by my hon. Friend is another matter.

Mr. Michael Morris: In view of the comments that there has been interference in the National Health Service, will


the right hon. Gentleman arrange, if it is not resolved by Monday, for a statement from the Secretary of State for Social Services?

Mr. Foot: What my right hon. Friend the Prime Minister said today was clear and I hope that the House will take that into account.

Mr. Loyden: Will my right hon. Friend say when we are likely to have a statement on Leyland? Will he give an assurance to the House that a debate will take place on the Floor of the House before any final decision is taken on the corporate plan?

Mr. Foot: I cannot promise a statement on the subject before Easter. I know of the strong desire of my hon. Friends that there should be a statement made to the House as soon as possible. When we have the statement, that will be the proper time for us to consider how best the House can proceed to consider these matters thereafter.

Mr. Pym: As our proceedings are to he broadcast after Easter, will the right hon. Gentleman undertake to set up a Select Committee on broadcasting before Easter?

Mr. Foot: We shall certainly get a move on in that respect.

Mr. Fernyhough: Does my right hon. Friend agree that if the Leader of the Opposition is anxious to raise the subject of Rhodesia, there is nothing to prevent her from trying to get in a week on Monday on the Consolidated Fund Bill?

Mr. Foot: I always welcome the right hon. Lady here, and I shall be happy to welcome her here on that date, too.

Mr. Higgins: Will the next Queen's Speech include provision for a companies Bill? The Prime Minister went out of his way to say that legislation on insider dealing was important. I was assured only a short time ago that a Bill would be produced. Is that Bill now to be produced?

Mr. Foot: As I mentioned before in another context, there are many legislative measures that we should like to bring forward. However the legislative programme of the Government and of the House is extremely crowded. It is doubt-

ful whether we shall be able to proceed with that Bill. Of course, we recognise its importance. If we do have to postpone it from this Session, we shall, of course, introduce it in the next Session.

Mr. Kilroy-Silk: Given the already intolerably high level of unemployment on Merseyside and the fact that about 6,000 other redundancies are now pending, I reinforce the plea of my hon. Friends for a debate on Merseyside's problems, and more importantly, the setting up of a special development agency for Merseyside so that the problems that are special and peculiar to the area can be dealt with locally.

Mr. Foot: As I have said to my hon. Friends from Merseyside who have put earlier questions, I fully recognise their deep concern on behalf of their constituents about unemployment in their area. [HON. MEMBERS: "Not only their constituents."] I understand that it is not only their constituents; it is the whole country. I recognise their deep concern about the matter. However, I cannot agree that a debate on that subject is necessarily the best way to proceed. I accept that we must take every possible steps to try to deal with the problem Some of these questions that have been posed by my hon. Friends—

Mr. Heifer: It is terrible.

Mr. Foot: —can be raised in other debates. I shall consider whether we may have some other form of debate after the recess.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. If we move as fast on the remaining questions as we have on earlier questions, I hope to call all those who wish to put questions. If not, I shall not be able to call them all.

Mr. Blaker: Apart from the debate on the Rhodesia sanctions order, which was a good many months ago, when did the House last have a debate on foreign affairs in Government time?

Mr. Foot: The hon. Gentleman puts that question to me, but I can put it to him, too. The Opposition have many opportunities—[HON. MEMBERS: "Government time."]—for selecting subjects for debate. They have often chosen subjects very different from those which are being raised now.

Mr. Banks: Does the Leader of the House agree with my estimation that we have not had a full day's debate on foreign affairs for over a year? Does he understand that it is intolerable that we should be denied a proper opportunity to debate the Rhodesia settlement before the Easter Recess? Therefore, will he reconsider his earlier statement?

Mr. Foot: I have nothing to add to what I said to the Leader of the Opposition at the beginning of the exchanges on that subject. Often long periods pass without the House having a full debate on foreign affairs. One of the reasons why there has not been such a debate for a whole year is that the Opposition did not select that subject for debate on the Queen's Speech.

Mr. Bowden: When the Leader of the House next reviews his list of Questions and the order for Question Time, will he consider having Social Services Questions on a different day of the week, because the present arrangement means that that important subject gets only three-quarters of an hour every time?

Mr. Foot: I shall look at the matter, although it is not exactly a question concerning the business for next week.

Mr. Marten: I recognise that we are to debate a number of EEC documents in the agriculture debate. But is the Lord President aware that, by stacking up so many other EEC documents after 10.30 at night, he is in danger of being thought to be treating the Common Market with the contempt that it is perhaps increasingly deserving? Nevertheless, will he consider whether we might have a whole day devoted to debating three or four different Common Market matters so that we may have a sensible vote on them?

Mr. Foot: I hope that the House will have that opportunity on Tuesday 21st March when there is to be a general debate on the agriculture price proposals.
On the general matter of discussing other EEC orders and measures, I do not deny that it is sometimes inconvenient for the House. But we have to take account of the fact that, for the first time in our history, there is the combination of a considerable amount of business from Northern Ireland, which adds to the pressure on the time of the House, and the

whole weight of Common Market legislation and debates on it. It is a tremendous extra burden on the House and we have not yet properly solved the problem. We are seeking to carry out the pledges that we gave to the House on these matters. I think that most of those who study these matters would agree that we are faithfully carrying out those pledges.

Mr. Onslow: Will the Leader of the House honour the undertaking that he gave last week by telling us whether the Government intend to introduce the Merchant Shipping Bill in this Session?

Mr. Foot: I have already indicated that it is doubtful whether we shall be able to proceed with that Bill. Indeed, we gave no assurance in the Queen's Speech that we should be able to introduce it in this Session. We are eager to introduce such a Bill. That is further proof of what I have been saying—that we have a whole list of important measures that we would like to bring forward when we have the proper time to do so.

Mr. MacKay: Does the Leader of the House realise that many hon. Members feel that a minor disruption of Government business is not sufficient reason for not having a debate on the vital question of the internal settlement in Rhodesia?

Mr. Foot: It is not a question of a minor interruption of Government business or the business of Parliament. There is also the question whether the most appropriate time for a debate on that subject has been reached. That question can be discussed generally between the usual channels if desired.

Mr. Jasper More: Will the Leader of the House reconsider his reply to my hon. Friend the Member for Reigate (Mr. Gardiner) regarding the Secretary of State for Social Services and these missing files? Does he accept that public concern is unlikely to be alleviated by a last-minute statement in reply to a planted Question followed by inconsistent statements from two successive Secretaries of State?

Mr. Foot: From the way that the hon. Gentleman has put the matter, I believe that it would be a waste of the time of the House of Commons to pursue it further.

Hon. Members: Cover up.

Mr. Kilfedder: Will the Leader of the House provide time to debate my Early-Day Motion No. 279 which seeks powers to enable the Northern Ireland Committee to meet in Northern Ireland urgently to debate security problems and the protection of lives in the Province?
Secondly, will he provide time urgently to debate the proposed contract between RAPIDATA and the Northern Ireland Office for the production of new driving licences, which many believe are a security risk and which others believe were approved in America when the Secretary of State went there last year?

[That this House considers that power should be given to the Northern Ireland Committee to meet in Northern Ireland urgently to discuss security in the Province, the protection of the lives of Ulster people, and the destruction of terrorism.]

Mr. Foot: I cannot find time for a debate on the second matter.
I cannot propose that we should have the kind of debate suggested by the hon. Gentleman on the first matter. There was a debate on security in Northern Ireland in the House earlier this week. The Government did everything possible to ensure that there should be assistance in having that debate. I believe that it took place at a time which was desired by most—not all—hon. Members representing Northern Ireland. I hope that the House will be satisfied with that.

MERSEYSIDE

Mr. Heller: On a point of order, Mr. Speaker. I should like your advice. On a number of occasions many of my hon. Friends from Merseyside have made requests for debates on the Floor of the House on the problems of Merseyside. We are not the official Opposition, so we are unable to have a Supply Day. Nor are we able to take the argument to the Welsh Grand Committee or the Scottish Grand Committee, and no such Committee exists for Merseyside. Therefore, all we can do is to ask the Lord President for a debate on what is fast becoming almost a disaster area for unemployment.
In view of the difficulties that we as Back Benchers have in properly raising problems and having them debated—not in an Adjournment debate of half an hour, but properly debated on the Floor

of the House—how can we ensure that we get a proper debate so that we may explain and argue the necessity for immediate and urgent action to be taken on the problem?

Mr. Speaker: Order. The hon. Gentleman is an experienced parliamentarian. He knows that I am in no position to advise him how to obtain a debate on the Floor of the House other than by pursuing it through the normal means open to hon. Members.

CONSOLIDATED FUND (No. 2) BILL

Mr. Speaker: For the debate on Monday 20th March on Second Reading of the Consolidated Fund (No. 2) Bill, hon. Members may hand in to my office by 9 a.m. on Thursday 16th March their names and topics that they wish to raise. The Ballot will be carried out as on the last occasion. An hon. Member may hand in only his own name and one topic.
The Consolidated Fund (No. 2) Bill includes certain Defence Supplementary Estimates for the current year as set out in House of Commons Paper No. 183, certain Civil Supplementary Estimates for the current year as set out in House of Commons Papers Nos. 184 and 241 and excesses in Civil and Defence Estimates for 1976–77 as set out in House of Commons Paper No. 244.
It will be in order on Second Reading of the Bill to raise topics falling within the ambit of the expenditure proposed in those papers. I shall put out the result of the Ballot later on 16th March.

RHODESIA

Mr. Cormack: I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 to discuss a specific and important matter that should have urgent consideration, namely,
the internal settlement in Rhodesia in the light of the Foreign Secretary's decision to return from Washington and of the forthcoming debate in the United Nations Security Council".
I believe that this matter is entirely specific. It is now a week since the settlement was reached in Rhodesia. The House has had no opportunity to


debate it properly and has had no clear lead from the Government as to their absolute intentions. In spite of that, the Government have reiterated, rightly, that there is a British responsibility for what goes on in that country.
It is important, as everyone in the House knows, because the peace of Africa and, indeed, the peace of the world can in some degree depend on events in that country.
It is also urgent, because the United Nations Security Council is debating the matter, and it would be a total travesty and completely wrong if the House did not have an opportunity to express an opinion while that debate is taking place.

Mr. Speaker: The hon. Member for Staffordshire, South-West (Mr. Cormack) gave me notice this morning, before 12 o'clock, that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
the internal settlement in Rhodesia in the light of the Foreign Secretary's decision to return from Washington and of the forthcoming debate in the United Nations Security Council".
I listened with great care to the exchanges this afternoon. The House knows that I have to decide not whether there is to be a debate but whether to give it priority tonight or on Monday. I have given considerable thought to the hon. Member's application, but I am afraid that I cannot accede to it.

BUSINESS OF THE HOUSE (SUPPLY)

Ordered,
That this day, as soon as the House has entered upon the Business of Supply, Mr. Speaker shall put forthwith the Questions which, under the provisions of paragraph (11) of Standing Order No. 18 (Business of Supply), he is directed to put at Ten o'clock.—[Mr. Harper.]

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, proceedings on the British Railways (Selby) Bill, set down for consideration at Seven o'clock by direction of the Chairman of Ways and Means, shall, instead of being considered at that hour, be considered at Ten o'clock, and may be proceeded with, though opposed, until any hour.—[Mr. Harper.]

DEFENCE ESTIMATES, 1978–79 (NAVY), VOTE A

Question,
That during the year ending on 31st March 1979 a number not exceeding 78,000 Officers, Ratings and Royal Marines be maintained for Naval Service.

put and agreed to.

DEFENCE ESTIMATES, 1978–79 (ARMY), VOTE A

Question,
That during the year ending on 31st March 1979 a number not exceeding 183,500 all ranks be maintained for Army Service, a number not exceeding 65,000 for the Regular Reserve, a number not exceeding 84,000 for the Territorial and Army Volunteer Reserve and a number not exceeding 10,000 for the Ulster Defence Regiment.

put and agreed to.

DEFENCE ESTIMATES, 1978–79 (AIR), VOTE A

Question,
That during the year ending on 31st March 1979 a number not exceeding 88,900 all ranks be maintained for Air Force Service, a number not exceeding 10,775 for the Royal Air Force Reserve and a number not exceeding 400 for the Royal Auxiliary Air Force.

put and agreed to.

CIVIL AND DEFENCE ESTIMATES, SUPPLEMENTARY ESTIMATES, 1977–78

Question,
That a further Supplementary sum not exceeding £786,995,000 be granted to Her Majesty out of the Consolidated Fund, to defray the charge which will come in course of payment during the year ending on 31st March 1978. for expenditure on Civil and Defence Services, as set out in House of Commons Papers Nos. 183, 184 and 241.

put and agreed to.

CIVIL AND DEFENCE ESTIMATES, EXCESSES, 1976–77

Question,
That a sum not exceeding £18,620,295·71 be granted to Her Majesty out of the Consolidated Fund to make good excesses on certain grants for Civil and Defence Services for the year ended 31st March 1977, as set out in House of Commons Paper No. 244.

put and agreed to.

Bill ordered to be brought in upon the two foregoing Resolutions by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Joel Barnett, Mr. Robert Sheldon, and Mr. Denzil Davies.

CONSOLIDATED FUND (No. 2)

Mr. Denzil Davies accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the service of the years ending on 31st March 1977 and 1978; And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 78.]

BRITISH STEEL CORPORATION

Mr. Speaker: I have selected the Government amendment to the motion on the Order Paper.
Before we begin the debate I should like to make a brief statement. I am in difficulty. There are 15 hon. Members who represent constituencies with major steel interests. There are other hon. Members who also have strong claims to be called. The debate raises major issues of concern which are wider than constituency interests. I shall do my utmost to ensure that a fair balance is maintained between the several interests, but I remind the House that those who succeed in being called should bear in mind the large number of other hon. Members equally anxious to contribute to the debate.

Mr. Douglas Crawford: On a point of order, Mr. Speaker. I am in no way questioning your selection of the amendment in the name of the Government but, in view of the great Scottish involvement in steel, would you consider also selecting the amendment in the names of my right hon. Friend the Member for Western Isles (Mr. Stewart) and my hon. Friends?

Mr. Speaker: I have announced my selection.

4.6 p.m.

Sir Keith Joseph: I beg to move,
That this House approves the First, Second, and Fifth Reports from the Select Committee on Nationalised Industries in Session 1977–78 relating to the British Steel Corporation.
We have three unanimous Select Committee reports on the steel industry and on the conduct of Ministers in relation to it. One of the main recommendations of the Select Committee was that before the Government announced their policy decisions to the House there should be a debate, in Government time, to allow the analysis and the unanimous recommendations of the Select Committee and the opinions of the House on them to be taken into account by Ministers. The Government were unwilling to allow such time, so the Opposition have made the time available for at least one day of the two days requested.
We believe that the Select Committee analysis of the condition of the steel


industry and its recommendations are sensible. As the House knows, Conservatives are not in favour of nationalisation, especially of an industry producing internationally traded goods such as steel. We think that nationalisation of steel has been bad for the country, bad for the people working in the steel industry, bad for suppliers, bad for consumers and bad for taxpayers, but that is not the subject of today's debate.
Steel is nationalised, and in that context we think that the diagnosis and the prescription of the Select Committee in its three reports are sound. With reservations on only one or two secondary issues, we approve the reports on the industry, and in our motion we ask the House to do the same. As for the conduct of Ministers, we think that the Select Committee has presented a case which Ministers should welcome the chance to answer.
I should emphasise at the start that no one, certainly no one on the Opposition Benches, believes that we should set ourselves up in Parliament as managers of a nationalised industry. But we are the bankers, and we represent the owners, and in both these capacities we are entitled, both directly and through the Select Committee, to inform ourselves. The experiences of the Select Committee have raised issues in relation to its powers which the House may wish to discuss. I am glad to see that my hon. Friend the Member for Leeds, North. West (Sir D. Kaberry) is in the Chamber, and I hope that others of my hon. and right hon. Friends and, indeed hon. Members on both sides of the House will pay heed to the experiences of the Select Committee in relation to its powers.
Seldom can a debate on a controversial subject have had so authoritative a base as the set of documents before us. Most of what I say will be drawn from the work of the Select Committee. Wherever it is not, I shall say so. We who have studied the Select Committee's work wish to commend its objectivity and its efforts very highly. We regard the analysis and the recommendations as solid, cogent, powerful and, in parts, magisterial.
I would add that most important of all, all three of the Select Committee's Reports were unanimous. We on the Opposition side of the House cannot understand why the Government, for their

part, do not agree with us in approving at least the analysis. Of course, we understand that Ministers would wish to give their colleagues the chance to answer the comments made upon them personally.
The Liberals evidently had a very active evening of negotiations and drafting yesterday. It is not quite clear from the change in the amendment now on the Order Paper what purpose they were seeking to serve, but perhaps if one of their number is lucky enough to catch your eye, Mr. Speaker, we shall understand what they have in mind.
But for all hon. Members, I should have thought that there was a very great deal of common ground represented by the Select Committee's reports. The theme of the Select Committee is the need for us to have an internationally competitive steel industry, with international manning levels. How can the Government possibly disagree with that? How can the Liberals not approve that as a purpose?
I am very glad to see from the Liberal Bench that the Liberals agree with that.
The Select Committee clearly perceives that an uncompetitive enterprise or industry—that is, an industry or enterprise that does not survive on what the customer at home and abroad is willing to pay for its products—is a precarious and an ill-rewarded one.
The Select Committee says that low productivity is the main obstacle to increases in the real wages of steelworkers. I am sure that we would all agree with that. But besides that, the Select Committee, in its unanimity, is not alone in identifying the importance of having an internationally competitive steel industry. After all, that was the theme of the agreement between the British Steel Corporation and the Trade Union Congress steel committee as long ago as January 1976. Indeed, the theme of international competitiveness was the essence of the Chequers meeting on industrial strategy.
Therefore, this theme of international competitiveness, to be achieved, among other things, by international manning levels, is common ground to all members of the Select Committee, to the TUC's steel committee, to the BSC and, indeed, to the Ministers concerned at Chequers,


under the leadership of the Prime Minister, with the industrial strategy. Therefore, we have a very solid basis of common ground on which to work.
I shall very briefly go through the analysis of the recommendations of the Select Committee. I shall not give references every time, but everything that I shall say on this subject from now on comes straight out of the Select Committee's report.
First, the condition of the industry has obviously suffered a very great deal from the world market recession and from the arrival of new and very intensive competition from countries that used not to have a steel-producing industry. Both of these factors are outside the control of the BSC. But the rest of the factors identified by the report are within the control of the BSC—first, the size of the programme; and second, the share of the home market retained by BSC, which has fallen very sharply, reflecting, as the Select Committee says, the inability to supply either to time or to quality.
I gather—no doubt the Secretary of State will tell us—that there is a slight upturn in the domestic share of the market, reflecting the restrictions imposed upon third country steel under the Davignon plan, but the penetration of the home market from our European competitors is still as great as ever.
The third factor within the control of the industry which accounts for its present condition is persistent overmanning associated with a high break-even point—both phrases I quote from the Select Committee's report—industrial disputes leading to long delays in contracting, in commissioning and in manning, delays associated with design and engineering, and unbalanced projects.
As a result of all these, the Corporation is financing only a fraction of its investent and is failing to service its capital. The Select Committee says that there is little hope of the British Steel Corporation being able to service public dividend capital or being able to meet a proper share of its capital requirements internally on present policies.
Those are the factors mostly within the control of the BSC that account for the present condition of the industry.
Sir Charles Villiers, the chairman, has explained that 40 per cent. of the loss is, in his view, due to world market recession, 40 per cent. to overmanning and 20 per cent, to keeping plants open under the Beswick plan. Of course, the Opposition understand the pledge given by the Government, called now the Beswick pledge. Of course we understand that the Government feel an obligation to keep that pledge—unless, presumably, superior obligations force them to revise that pledge. Of course we understand that the Government's pay policy—with which, as the Secretary of State knows, we are not in agreement—presents obstacles to demanning.
In the light of all these factors, and of this diagnosis, the Select Committee recommends reconsideration of the size of the capital programme, recommends de-manning and improved working practices, and maintains that drastic action was needed, has been needed and was not taken. It sets aside the excuse by the Secretary of State that the social and political consequences of action by the Government or the Corporation were too grave for anything to be done when the loss was £350 million a year, and points out that the loss is now over £500 million a year and that the social and political consequences of the action that will now have to be taken will be graver than they would have been had action been taken earlier.
I want to point out, briefly, the implications of failure by the Government and the Corporation to act to stem the losses earlier. There is the impact on the taxpayer. These huge cumulative losses have to come straight out of the pocket of the taxpayer.
There is the impact on the Budget. The estimated loss in the current year will exceed total tax revenue from North Sea oil. The estimated loss for the current year must have entered most vexatiously into the Chancellor of the Exchequer's plans for his Budget. It will mean either a higher tax take or higher public sector borrowings, or less public spending on such things as kidney machines or subsidies, or whatever the party in power seeks to put as a priority. But consequences and implications for the taxpayer there certainly are from these losses.
Also, of course, there is an impact on suppliers, whose expectations have been


shattered. There is also an impact on the people working in the industry and all connected with them, because the people working in the industry read the newspapers, and they are well able to judge the uncertainty in which their jobs stand. They well realise that they cannot make plans on any solid basis while the industry is propped up precariously on taxpayers' funds. The strain of working in the industry under conditions of uncertainty must be borne in mind.
The Secretary of State may well say, "What about the implications of acting? Suppose the Government had acted earlier, and suppose the Government had authorised the Corporation to act earlier—what about the Beswick pledge, and what about jobs?" The Select Committee recognises the los of jobs involved in reducing the losses, but recognises that it is a higher national need to have a competitive industry. The Select Committee recognises that some of the cash now used to keep plants open should be used to slim down the manning and to close down some plants.
After all, the Select Committee has discovered—indeed, the papers have told us—that not all steelworkers are unwilling to go. Some of them are voting with their palms when there is the opportunity to have redundancy pay. In fact, we can hope that demanning, belatedly, is starting now.
We on the Opposition Benches agree with the Select Committee—as I hope will hon. Members in all parts of the House in the light of the Select Committee's unanimous reports—that overmanning is bad for the country and bad for the workers. There is this solid piece of common ground on which we all stand.
I hope that from neither the Secretary of State nor the Minister of State will there be any argument whatsoever in terms of vilification of the Opposition, or allegations that we want there to be fewer jobs. After all, the Minister of State was said by a journalist, Geoffrey Goodman, writing in the Daily Mirror, to have produced a confidential report which spoke of cutting the industry down to a size at which it could, indeed, be, as the Government's amendment proposes, competitive and profitable. That, according to Mr. Geoffrey Goodman—not well known as an adherent of the Conservative Party—would have involved cutting down by

a quarter the jobs in steel, and the Minister of State has not denied that such a report exists. Subjected to pressure by the Select Committee, he said, papers were constantly being prepared.

Mr. John Mendelson: Having brought in Mr. Geoffrey Goodman, would the right hon. Gentleman tell the House and the steelworkers whether at the time the Beswick plan was worked out in agreement with the trade unions, the Opposition would have disregarded that and would have produced large-scale redundancies against the opposition of the trade unions and industry?

Sir K. Joseph: We would not necessarily have sought the agreement to which the hon. Gentleman has referred. We regard the trade unions as very strongly entitled to put the case for their members, but we do not regard the hands of the Government as tied by the necessity for agreement.

Mr. Peter Hardy: The right hon. Gentleman has suggested that demanning should start now and has referred to Mr. Geoffrey Goodman's suggestion of a reduction by one quarter in the labour force. Is he aware that in the last decade the labour force of the British Steel Corporation will have declined from 267,000 to less than 200,000 by the end of this financial year?

Sir K. Joseph: But we have to look at that in terms of manpower and production. It was not Mr. Goodman's proposal. Mr. Goodman was maintaining that it was the proposal of the Minister of State. But more important than whether the Minister of State made such a proposal—and perhaps he will tell us—is that the loss paid by the taxpayer may save jobs in steel but only at the cost of jobs elsewhere, because subsidies from the taxpayer simply shift unemployment generally from the less to the more efficient enterprises in the economy. There is no costless way out. There is no cost-less way to rescue British Steel. The only way is by its own efforts, as indicated by the Select Committee. Only in that way will they achieve profitability and competitiveness.

Mr. Mendelson: What would the Conservative Party have done?

Sir K. Joseph: I am asked by an hon. Member, what would we do? I am able to say categorically that we would do as the Select Committee recommend, as we approve the analysis and recommendations of the Select Committee in the problems of the steel industry. There are, of course, important questions of management and of union consultation, but the Government ultimately have the last word. Will they continue or will they not continue to finance the present investment programme and excessive labour costs?
I turn now to the conduct of Ministers where the questions really are their vigour, or lack of vigour, in handling the problems of the industry.

Mr. Neil Kinnock: Can the right hon. Gentleman be specific about supporting the recommendations of the Select Committee's Report? Can he tell us in equally specific terms—because this is a vital matter—to what would he commit his party in the event of it being in government in terms of new investment, now and on a continuing basis, for the redevelopment of the industry? It is no good avoiding this because it is a crucial central factor.

Sir K. Joseph: We want the industry to generate enough internal funds to make a significant contribution to its own investment but in general we must await the review by the Government of the investment programme. Conditions have changed sharply since my right hon. Friend the Member for Worcester (Mr. Walker) when he was the Secretary of State concerned, in the Government of my right hon. Friend the Member for Sid-cup (Mr. Heath), approved the then investment plan. There is a world recession. The right hon. Gentleman the Secretary of State, then spokesman for the then Opposition, was going round the country claiming that the proposals of the Conservative Government were far too small and that there should be an investment programme to produce 40 million tonnes a year, not 32 million; so we are entitled to say to this Government now that when we come to office we shall have to take account of profitability, the level of investment and how much can be financed as a basis from internal funds, from the cash flow of the industry.
The Select Committee considered two particular features of ministerial conduct, vigour or lack of vigour in dealing with, or allowing the management of the British Steel Corporation to deal with, the problems, and their frankness in relation to this House.
I hope the Ministers will not lay any false trails before us. I hope they will not try to escape by explaining that the world market is in recession. We know that and we know the amount of loss due to it. I hope they will not try to escape by claiming that other steel industries are doing as badly, because I have a list of the losses of the main steel industries of the world and of the British Steel Corporation per tonne. That is the significant figure. Its loss per tonne in 1977 was the highest of all and it is accompanied at the top by other State-owned industries. [HON. MEMBERS: "Oh."] My note says that the British Steel Corporation does not dispute these figures. The loss for the year 1977 per tonne was £31 for British Steel, £31 for Italsider of Italy, £25 for Sacilor, France and £25 for Cockerill of Belgium. All the rest were far lower. The highest few are nationalised.
I hope the Minister will not try to escape on that. I hope Ministers will not try to escape on the slight upturn in the share of the home market which is the result of the Davignon plan. I hope they will not try to escape by claiming that they are pledged guardians of Beswick, because they are also pledged guardians of the taxpayers and they have to reconcile the two. I hope they will not try to escape by pleading the difficulty of forecasting, though that is difficult. If we have to borrow we have to do it on the best forecast, and when borrowing it is all the more important to grapple with identified problems.
As the Select Committee says in paragraph 15 of its Fifth Report, there was a massive turnround in the fortunes of the industry in the early part of last year, yet Ministers appear to have been unwilling either to let managers manage or to take the awkward decisions themselves. They have behaved in the last years like Micawbers and show every intention of wanting to continue to act like Micawbers, and yet they know very well the needs of the industry and the proper interests of the steelworkers. As


they say in their amendment, they seek a profitable and competitive industry, and that will involve reviewing the investment programme and securing demanning in the industry.
What did they do when the new decline in the condition of the industry was brought forcibly home to them, and when the estimated loss for the current year was seen to rise dramatically? What did they do? The Secretary of State went on holiday. I do not imagine that the head of a private firm, faced with shocking conditions that would have bankrupted a giant enterprise, would have gone on holiday without asking probing questions. There seems to have been general assumptions by Ministers of access to the bottomless purse of the taxpayer. [Interruption.] I am quoting the point about a holiday from the Select Committee's report. When nobody owns or when everybody owns, nobody, at least in the Department, seems to care.
The hon. Member for Bedwellty (Mr. Kinnock) asked at a meeting of the Select Committee what efforts were made by Ministers to reduce the losses below the estimated level. It appears from the answer of the chairman of the Corporation that he was unaware of any such efforts. It appears from the Select Committee's reports that the Secretary of State and the Minister of State took Parliament and the taxpayers for granted.
The Select Committee says:
senior Ministers of the Crown four days before a major debate in which the House of Commons was being asked to approve an increase in the borrowing powers of the Corporation of £1,000 million from £3,000 million to £4,000 million did not see fit to press the Corporation as to what their expected loss was on the basis of the latest possible figures. Instead they were content to work on forecasts submitted two months before, even though experience over the previous twelve months had shown that such forecasts were liable to become rapidly out of date and it was known that figures based on the quarter ending 30th June were about to become available.
It adds:
there was a failure by Ministers to press for proper information.
If the City were seeking money as casually as the Minister of State sought it, he would be among the first to criticise—and he would be right to criticise.
The Select Committee comments on the marked contrast between the Minister of

State's optimistic statement in the debate that it was hoped that
the upturn that is taking place will assist the Corporation."—[Official Report, 22nd July 1977; Vol. 935, c. 2136.]
with the more pessimistic statement made in private by the chairman of the Corporation four days previously when he said:
I am bound to say I do not yet see a significant upturn in demand or price.
I hope that the Minister of State will explain the extraordinary aberration in his speech. It was full of grave comments about the situation, yet suddenly there was the positive statement that an upturn was taking place. We should like him to explain that to us. If he made a mistake, let him say so. I agree that other parts of his speech were grave, but when my hon. Friend the Member for Mid-Sussex (Mr. Renton) spoke, in the debate on an increase in the borrowing powers, of the industry "drifting to disaster"—which was precisely what was happening, as Ministers knew, or should have known—the Minister of State took it upon himself sanctimoniously—there is no other word for it—to rebuke my hon. Friend.

Mr. John Mendelson: What is the right hon. Gentleman doing now?

Sir K. Joseph: I hope that I am representing, no doubt inadequately, the view of the Select Committee which pointed out these matters itself.
Whether the loss was £250 million, £350 million, £450 million or £520 million, the condition of the industry was desperate. Any loss of these dimensions should have been a stimulus to Ministers to allow the Corporation to take action to stop the rot, but it appears from the Committee's report that the Secretary of State was inert and the Minister of State made a statement that he must have known was false. The House will want to hear the answers of both Ministers to the charges made by the Select Commitee. If they made errors, I hope that they will tell us.
I hope that the Government will heed the view of the Committee and the views of hon. Members in the debate. The Committee expressed its fear that there would be fudging, followed by a renewed steel crisis
in a yet more virulent form.


We hope that there will be no such fudging. We believe that there should be no further capital without a specified rate of demanning as recommended by the Select Committee. We believe that there should be a revised capital programme as recommended by the Committee and that cash limits should be split, as recommended by the Committee, between revenue and capital.
We believe that the Select Committee unanimously recognises economic realities and the real interests of the country and the steel industry. We hope that Ministers will work along the lines recommended by the Committee and we certainly ask the House to approve the Committee's unanimous reports.

4.35 p.m.

The Secretary of State for Industry (Mr. Eric G. Varley): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof,
takes note of the First, Second and Fifth Reports from the Select Committee on Nationalised Industries, and accordingly calls upon Her Majesty's Government to bring forward proposals in consultation with the British Steel Corporation and the trade unions to secure a future for a modern competitive and profitable industry".
The motion is not what the Select Committee wished the House to debate. Last week every Member of the Committee including those from the Tory side, tabled a motion to take note of the three reports, and that motion is incorporated in the Government's amendment. The Opposition's decision to move a motion to approve the reports is a deliberate decision to turn the three reports into a vehicle for party political attack.
My hon. Friend the Member for Bedwellty (Mr. Kinnock), who was a member of the Select Committee, said during business questions last week, with his customary understatement:
this is the most incompetent and stupid abuse of the purpose of Select Committees tint that it is the most insensitive and contemptible disregard of the real needs of the steel industry to use it for stupid and superficial party political purposes?"—[Official Report, 2nd March 1977; Vol. 945, c. 670.]
That was what a Member of the Select Committee said about the way the official Opposition have handled the debate.

Mr. Peter Rost: The right hon. Gentleman prefers a cover-up.

Mr. Varley: I consider that there is a great deal in the reports which merits serious consideration, and we are giving them that consideration.

Mr. Patrick Cormack: Will the right hon. Gentleman give way?

Mr. Varley: No. The Government will, of course, be responding to the reports by means of a White Paper, and we shall be doing this as soon as possible.
It is clear that the Opposition's motive in seeking a debate is not necessarily—in view of what the right hon. Member for Leeds, North-East (Sir K. Joseph) has said—to engage in a constructive discussion of the Committee's long-term recommendations. They have sought the debate in order to use the reports for party political advantage.

Mr. Cormack: Will the right hon. Gentleman give way?

Mr. Varley: No. I am not giving way.

Mr. Cormack: On a point of order, Mr. Deputy Speaker. Why is it partisan to endorse unanimity?

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): The hon. Gentleman knows perfectly well that that is not a point of order.

Mr. Varley: The right hon. Member for Leeds, North-East concentrated at least half his remarks on the Fifth Report of the Select Committee and very little on the First and Second Reports and their recommendations. It may be that many hon. Members in all parts of the House will not regard the debate as wholly successful if it concentrates merely on who said what to whom between 18th July and the middle of August last year. If we do that—I have no wish to avoid any of the charges directed against me, and my hon. Friend the Minister of State has no wish to fudge the charges against him; I shall be coming to them—many hon. Members will regard it as a wasted debate, especially if we do not look at the whole work of the Select Committee.
Although the Minister of State and I naturally have to refer to the charges levelled against us in the Fifth Report, the Committee's reports have been set


against the most serious world steel recession in memory. I make no apology for mentioning that.
We can see the present situation of the British steel industry only against the background of world circumstances. The recession does not affect only the British industry. Steel industries throughout the developed world, including the United States and Japan, are facing a great crisis. In the United States, the Bethlehem Steel Corporation made a loss of £250 million in the first nine months of 1977. This included a large write-off of closure costs.

Sir K. Joseph: In the next quarter it was in profit because of the action that it took in the nine months to which the Secretary of State referred.

Mr. Varley: I do not deny that some of the steel companies made profits. I am saying that there are many steel industries throughout the world, publicly and privately owned, which are in exactly the same difficulties as the British Steel Corporation.
In Japan, the five largest steel manufacturers are reported by the Japan Commerce Daily on 21st November to have made losses in the six months to the end of September. One of those five, Kobe Steel, has just announced the closure of two plants from 1st April.
Most developed countries are having to take action to assist their steel industries. The French and Swedish Governments are advancing loans to their loss-making steel industries either at preferential interest rates or under arrangements for deferred repayment. Even in Germany, the Government of North Rhine-Westphalia subsidise the coking coal used by their steelmakers.
The problems of the British Steel Corporation are not unique but they are very serious. There is no doubt about the seriousness, but they are not necessarily the worst. Wherever one looks throughout the developed world, every steel industry entered 1977 expecting an upturn and was faced instead with a continually deteriorating situation. That the position of the British Steel Corporation deteriorated is not in doubt. But the nature of that deterioration was widely misunderstood because of the misunderstanding and misinterpretation of the information published last March.
The implications of the figure in the Financial Statement and Budget Report presented to Parliament last March were that the BSC would incur a loss of £250 million in the current year. But the figure of internally-generated funds was misunderstood, at least originally at the beginning, and this led the Select Committee to believe that the deterioration was much steeper and much more rapid. That was cleared up in the evidence which I gave on either the first or second occasion. This was a major source of misunderstanding that arose between the Select Committee on the one hand and the BSC and my Department on the other. As a result, statements have been made about the Corporation, its chairman and the adequacy of information which I must reject as quite unwarranted.

Mr. Tim Renton (Mid-Sussex): Surely the point that the Secretary of State has just mentioned is a red herring. The the current year, debated in Parliament last year, showed a loss for the current fact is that the annual operating plan for year of £350 million. The Department was aware of that figure by the end of April.

Mr. Varley: It was around the period of the Financial Statement and Budget Report. That is correct. I thought that we had cleared that up with the Select Committee. I shall probably have to go back to the hon. Member and explain it to him. In my judgment, that was one of the major sources of the difficulties that existed between the Select Committee, the Government and the BSC. At all times the Corporation has kept my Department properly informed. We have made sure that Parliament, including the Select Committee, has been equally and properly informed.
The waters have been muddied by a page from an internal BSC working document which was never provided to the Department of Industry, which it would have been quite improper for the Corporation to have transmitted to my Department and which was mischievously and anonymously leaked to certain newspapers and hon. Members on 13th January this year. Six months after it was circulated within the Corporation.
That document showed a projected loss figure of £466 million. This was based on internal forecasts which we now know


were being internally examined and processed within the British Steel Corporation from 14th July onwards but which were not communicated to the Department of Industry until almost a month later, after the Corporation had properly considered them. It is around that figure that much of the controversy has revolved.
Should the Corporation have informed me of that projected loss figure when my hon. Friend the Minister of State and I met the chairman and chief executive on 18th July to discuss the report and accounts of the previous financial year which were to be published the following day? Without knowledge of that figure—that is the £466 million figure, because neither my hon. Friend the Minister of State nor I had knowledge of such a figure—ought I to have challenged Sir Charles's forecast when the last figure available at the end of May was a projected loss of £350 million?
Was Parliament properly informed of the true situation in the debate on the borrowing powers order the following Friday, 22nd July? My hon. Friend the Minister of State will be dealing with this last point when he winds up the debate because the Select Committee's report specifically refers to that debate.
I now want to deal with the first two questions because they are crucial to the argument and to the discussions that we have been having. In the evidence that he gave to the Select Committee on 30th January, Sir Charles Villiers dealt with the question of whether he should have told me of the figure of £443 million which was contained in an internal BSC document produced on 14th July.
The hon. Member for Mid-Sussex (Mr. Renton) then questioned Sir Charles. He asked:
The figure of £443 million loss was reported by Mr. Scholey to the Board in the week of 16–22 July and that was clearly a figure which he had taken a lot of trouble to arrive at?
Sir Charles replied:
I do not think that is exactly right because 14 July was when the figure came forward in that form and it was not until 28 July that this paper, having by then been refined and improved, came to the BSC Board. This was the supplementary report which you have, which was leaked to The Times on 13 January and it did not reach the Board until 28 July, by which time a lot of work had been done on it and I was prepared, on behalf of

the Board and with the Board, to accept it, but in the verbal form in which I received it on the Sunday, two days before the press conference, I was not prepared to accept it at face value".
So Sir Charles explained to the Select Committee very clearly that when he met me on 18th July the £443 million figure was one which he would not have used outside the business. It was only on 28th July—ten days after he met me—that a more considered estimate could be put to the board, forecasting a loss of £466 million. Even on 28th July the BSC board rejected this forecast as "quite unacceptable", and appropriate remedial action was being put in hand. It then went forward in the normal way and reached the Department in the quarterly report which was sent to officials in my Department on 12th August.
I should explain that the quarterly reporting procedure was initiated by a Labour Government and has been considerably tightened up over the past three years. Therefore, Sir Charles Villiers clearly explained to the Select Committee why he did not give me that figure.

Mr. F. A. Burden: Surely that figure of £443 million must have been accounted by someone entirely responsible within the Corporation. If it was brought to the notice of the chairman surely, if it was arrived at by a responsible person in the Corporation, it should have been conveyed to the Minister.

Mr. Varley: I am coming to that point. I do not want to avoid it, because it is germane to this argument.
The Select Committee was also given a most authoritative explanation of why Sir Charles, in his Press statement on 19th July, did not go beyond the range of possible loss contained in that statement. This explanation—if you, like, Mr. Speaker, this vindication—was contained in a letter sent to Sir Charles on 10th February and forwarded by Sir Charles immediately to the Select Committee.
The letter was written by Mr. R. L. Emmitt, one of the senior partners of the highly reputable City accountants Coopers and Lybrand. He wrote as follows, and I shall quote this at length:
I have considered the degree of disclosure made by the Corporation of its deteriorating financial position against this background. I particularly take into account the fact that on


14th July there was produced for submission to the Chief Executive's Committee
—That is, Mr. Scholey's committee—
a finance paper which gave a further indication of the financial deterioration as a prelude to urgent consideration by the Board and top management as to the action to be taken. The loss projected in that paper was about £450 million, but this took no account of any action by the Board or top management to reduce it.
Mr. Emmitt went on:
In my view, having regard to the status of this finance paper, it would have been misleading at that stage to have based any published announcement on the figures in that paper. Nevertheless, your circulated Press statement on 19th July reflected a somewhat more pessimistic outlook compared with the words in the annual report printed earlier and referred to remedial action being taken or planned.
And Mr. Emmitt went on:
I have discussed the situation with some of my partners and they support me in my view that, in the circumstances in which the Corporation found itself at the time of the publication of the annual report and its discussion at the press conference on 19th July, having regard to the extent of the reliable information then available to the Corporation, an adequate disclosure of the deteriorating trading prospects of the Corporation was given in the documents published on that day.
It is easy, with hindsight, to argue that more might have been said, but I do not think it realistic in all the circumstances to have expected that you"—
that is, Sir Charles Villiers—
could have said more than you did at the time pending completion of the detailed assessment of prospects which was then in hand.
That is a most important statement that the House should not disregard. It came from the Corporation's own auditors, a firm of accountants of high reputation and acknowledged integrity. I am astonished, quite frankly, that the Select Committee did not attach sufficient weight to that note from a firm of City accountants with a reputation that no one will dispute. The note should have been given more weight by my colleagues.

Mr. Nicholas Ridley: Does the Secretary of State not agree that the writing of that letter destroys the reputation of these auditors? Will he invite the BSC to change its auditors, since they have devalued their reputation by writing such a disgraceful note?

Mr. Varley: I thought that the hon. Gentleman was going to make a serious

point, but as usual he makes a snide point against this highly reputable firm of City accountants. I do not think that any other Conservative Member would agree with him.

Mr. Mike Thomas: We are on a narrow point and I hope my right hon. Friend will forgive me if I give him the chance to clear it up. The Select Committee report says that none of the members of the Select Committee believes that Sir Charles should have made the figure of £443 million or anything like it available at his Press conference on 19th July. We read carefully the letter from the accountants. Our sole point was that it was an error of judgment on the part of Sir Charles for him to have used these specific words
might even be comparable with
which implied that the £255 million figure was an outside estimate when he must have known at the time that it was not.

Mr. Varley: This is a matter of judgment, the judgment of my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) and the other members of the Select Committee, and the judgment of the auditors of the British Steel Corporation. That is what it boils down to.
The auditors have said
It is easy, with hindsight, to argue that more might have been said, but I do not think it realistic in all the circumstances to have expected that you could have said more at the time
That is what Sir Charles Villiers relies upon, and he was right to do so.
I have a further quote I should like to give the House. On 27th February the Financial Times further vindicated the Corporation in a leading article when it said:
In point of fact these procedures appear to have signalled danger as quickly as could reasonably be expected in a fast moving situation which caught steel makers everywhere off their guard.
So, Mr. Speaker, I think that the case can fairly be made that Sir Charles behaved with absolute propriety in providing information to the Government, to Parliament and to the country.
The second conclusion which the Select Committee said was to be drawn was that there was a failure by Ministers to press for information. I have already


pointed out that under this Government, the procedures for providing information to Government by the Corporation had been greatly improved. What the Select Committee was therefore asking was whether I should have taken steps beyond the normal procedures to obtain information.
But the Select Committee's report itself shows that I did press for information. Paragraph 8 of the Fifth Report records that at my meeting with Sir Charles Villiers on 18th July I asked him
Will it (the prospective loss) he £250 million or £350 million?
It then goes on to say:
The Chairman's diary note records that he replied 'I have every hope with the action we are now going to take we will be able to contain it at the lower figure, but I am bound to say I do not yet see a significant upturn in demand or price'. The Secretary of State"—
that is me—
apparently accepted this explanation without further question or comment.
I find this conclusion by the Select Committee extraordinary, because two sentences later the report itself records that I went on to press Sir Charles on this very matter. This is what it says:
The Secretary of State replied that ' the Corporation's approach would have my full support both in the House during the debate on the Order and when I talked to colleagues. My view was that people should know if things were going to be difficult'.
And the report goes on to say:
Sir Charles Villiers said that the situation was not as bad as had been painted, the Corporation were unlikely to lose as much as £250-£350 million in the current financial year.
So the report itself, in the account of that meeting, shows that I asked Sir Charles Villiers what he expected the forecast loss to be. It shows, too, that Sir Charles Villiers replied. I then pressed him further and he amplified his reply in response to my pressure.
That does not bear out at all that we failed to press him. It shows the opposite—that we pressed him. Short of telling Sir Charles Villiers that I did not believe him when I did believe him and when I had every reason to believe him, my actions could only be regarded as entirely proper in the circumstances. The implication of what some people are say-

ing is that I should have said to Sir Charles Villiers after that questioning, "I really do not believe you. I do not accept what you are saying. There must be something else." That is the implication, because he was pressed at that time.
In any case, while the Select Committee report concentrates a great deal of its attention on this period in late July, it states quite clearly that in its view action to deal with the Corporation's financial problems should have been taken much earlier.
Paragraph 16 of the Fifth Report says:
It was therefore clear by April or May 1977 when the Annual Operating Plan had been agreed that, unless action was taken, there was likely to be a loss of up to £350 million in the year 1977–78. By this time also the Corporation themselves had begun to accept that in their own words the traditional steel cycle had gone' and that 'the landmarks had disappeared'. At least by then some action should have been taken; the evidence given suggests that nothing was done.
But far from showing that nothing was done, the evidence given to the Select Committee showed that a great deal was done. On 18th May the Corporation announced that the Port Talbot development had been deferred due to the trading and financial situation. Again, in 1976 the Corporation proposed a 2 million tonne plate mill in the North-East. At my request that was re-examined in the light of market assessments and the Corporation came back with the conclusion that the capacity at this mill should be reduced from 2 million tonnes to under 1 million tonnes. My hon. Friend the Minister of State announced that in the debate on 22nd July.
There is no doubt that BSC has undertaken and is still undertaking a considerable and continual process of entrenchment to meet the trading situation. It has been taking out of operation—permanently or temporarily—coke ovens, blast furnaces, steel melting shops and mills. The latest estimates that I have show a progressive reduction of 3·7 million tonnes of blast furnace capacity and 2·4 million tonnes of melting shop capacity since April 1977. Also, there have been reductions in shifts, overtime and other costs.
The Government have also acted within the framework of the EEC to secure better trading conditions for steel. We have consistently sought the vigorous


application of measures by the European Community both to maintain steel prices within the Common Market at more economic levels and to prevent their being undermined by dumped imports. As the steel situation deteriorated the Commission was persuaded to introduce more extensive measures last December. These include mandatory minimum prices for certain products and higher guidance prices. The Commission is also negotiating agreements covering prices and volume with major supplying industries. The Government will continue to seek improvements in these measures to meet the needs of the present situation.
The only action that I could have taken would have been to advance the closure of older plants, including plants on which the Beswick commitments were given. But I ask what the reaction of the House would have been if one month into this financial year, 1977–78, I had come to the House of Commons and said "The BSC has produced an estimate that in the financial year ending 11 months from now it is likely to have a loss of £350 million" and if I had gone on to say, "In order to deal with the loss which the British Steel Corporation believes it will be announcing in 11 months' time we have decided to abandon the Beswick commitments and close down immediately all the high cost plants". That would have been an arbitrary and precipitate action and not the action that was recommended by Members of the Select Committee. That is the sort of action that all the newspapers from The Daily Express to The Daily Telegraph were recommending. One only has to think of it for a microsecond to realise that that argument is totally false.
It is interesting to look at what was said to the Select Committee. In the summer of 1975, in consultation with the unions, the British Steel Corporation warned of a prospective loss for the forthcoming year of £375 million but the actual loss turned out to be £255 million. Mr. Scholey himself referred to this situation when he gave evidence to the Select Committee on 30th January. I quote from page 23 of the minutes of evidence:
It was very interesting that, when the Chairman met The Times on that January 14th interview, I referred to the situation that obtained in 1975, when we had the £375 m. and finished up with £255 m The Times'

correspondent's reaction to that was, 'Oh, that was the year you tried to frighten the unions with an over-heavy loss'. There is no doubt that one has to be careful about prematurely pushing forward big figures before you have really worked out how you can bring them under control.
If we had proposed drastic action of that kind one month into the financial year, or even three months into the financial year, on the basis of a forecast loss or an internal British Steel Corporation financial paper which we did not even know about and which did not see the light of day until it was leaked to a newspaper and to certain MPs in January of this year, the unions would not have believed us and certainly would not have co-operated with us.
I remind the House that if it had been possible—I know that hon. Gentlemen do not believe that it is possible as a result of this information—and if I had been foolish enough to do that and to take arbitrary action, there could have been massive industrial action within the steel industry and the cost would have been £150 million a month. The cost to our balance of payments would have been at least £50 million a week. Just as serious would have been the set-back to the British Steel Corporation's effort to regain market share and the customer confidence that it wanted to maintain.
Over and over again I have made it clear that the only way in which we can deal with the problems of the BSC is in consultation with the BSC, with the trade unions, and taking fully into account the views of hon. Members, of the House of Commons. During the past three months, during the course of our consideration in depth of the Corporation's problems, we have had regular meetings with the BSC and with the unions, the latest being only this week.
I believe that the unions, led by Mr. Bill Sirs, are showing great statesmanship in their readiness to co-operate with us and find remedies for the impact on the British Steel Corporation of the world steel crisis. A good deal has been achieved. The recent pay agreement with the Iron and Steel Trades Confederation, the largest of the steel unions, reaffirms the joint commitment to productivity schemes.
As the House knows, I shall want to make a full statement to the House before the Easter Recess about the


British Steel Corporation. Discussions are still taking place, not only between the BSC and ourselves, but within the Government.
The steel unions have issued a great number of messages and statements which broadly support our approach. A week or so ago the Scottish TUC said that
the Tories…are angry because the British Steel Corporation has not gone along with their proposals for even more massive cuts in investment and massive redundancies".
I do not know whether that is what the right hon. Gentleman and his hon. Friends want.
This week the TUC steel committee issued a statement declaring its support for our approach to the problems of the steel industry. I am afraid that the right hon. Gentleman's words will be interpreted—I am sure by those in the steel industry whose livelihoods depend on the steel industry—as a policy of despair to a very great extent. I know that the right hon. Gentleman does not like nationalisation. He says that. He was a member of the Government who did not denationalise the British Steel Corporation. I do not think that anybody in the House contemplates the destruction of the nationalised steel industry at present with all the problems that it faces.
As I have said, other Governments in Europe are making absolutely clear then insistence on rescuing their steel industries. The Belgian Government are making considerable loans to their private steel industry and are guaranteeing their industry's credit with the banks.
I hope that we shall not be ready to play politics with a vital national asset. The steel industry is absolutely essential to our economy. It is needed to play a major part in our industrial recovery.
The Government are determined to save the steel industry. They want to do that with the support of the House and not against the wishes of the House. We want to deal with the social consequences of modernisation and ensure that we reach a viable and profitable and competitive steel industry. That is why I want the House to support my amendment.

5.11 p.m.

Mr. Edward Heath: I am grateful for this opportunity to make an intervention that I hope will be brief, because I see that many hon. Members wish to take part in the debate, including the Chairman of the Select Committee. I intervene because I wish to make two general points that I think are of importance beyond some of the specific subjects that we have been discussing so far.
First, I should like to refer to some immediate aspects of the Select Committee's report. I think that every hon. Member will agree that a Select Committee should be supported in all its activities. Where the Select Committee asks for that support, I have absolutely no doubt that it should be given. The House and the Committee should have confidence in that fact, because it is an instrument of the House which is given powers by the House.
I want to add one further aspect, that the whole House would wish that such investigations—if I may use that word—as we must make from time to time should be carried on in an amicable way between all the parties concerned. It is not for the benefit of the House that action should be taken such as the Select Committee thought it necessary to take in order to secure access to documents. Hitherto Committees have been able to act without such action, and I hope that that will continue to be the case in future.

Mr. Dennis Skinner: Mr. Dennis Skinner (Bolsover) rose—

Mr. Heath: I am trying to be brief. Let me deal with these points.

Mr. Skinner: Mr. Skinner rose—

Mr. Speaker: Order. If the right hon. Gentleman is not giving way, he must be allowed to proceed.

Mr. Heath: I said that I hoped that everybody in the House would agree—

Mr. Skinner: A lot of us do not—Mr. Consensusman.

Mr. Heath: The second question is on the position of Ministers. The Secretary of State's conduct has been questioned by the Select Committee. The Committee left it open to the House to take any decisions about the actions of Ministers, and it is up to the House.
The Secretary of State has given his explanation of what occurred. For me, the question is "Did the right hon. Gentleman or his colleague deliberately mislead the House by the information that they gave?" The Secretary of State's answer is that he did not deliberately mislead, that he gave what he believed to be the best information in his possession. I am prepared to accept what the right hon. Gentleman says in those circumstances. He owes it to his conscience to judge whether he is dealing fairly with the House. That is always the case with Ministers.
The other question is whether the Secretary of State was guilty of any negligence in August. In my view that is a matter for the Prime Minister. If he concludes that the Secretary of State was negligent and damaging to his Administration, it is his responsibility to remove the right hon. Gentleman. We recognise that he cannot give any undertaking to the House that the replacement will in any way be an improvement. This is entirely a matter for the Prime Minister.
We then come to the chairman of the British Steel Corporation. Here it is a matter whether the Secretary of State has confidence in the chairman of a nationalised industry. If he has not, he must remove him. If he has—and he has stated specifically on many occasions, including today, that he has—it is understandable that he keeps him there.
The one point that I should like to make in reference to this is that it seems to me to have been, let me say, an unusual position in which the chairman of BSC did not at least warn the Secretary of State when he saw him at that meeting that the possible loss brought forward by those working on this matter at BSC was so much greater than the previous figures.
This may very well be a question of the relationship between the chairman of a nationalised industry and the Secretary of State concerned. I realise full well how difficult these relations are. Many hon. Members and others outside the House say that chairmen must have complete independence, but that makes it more difficult to have a complete relationship of confidence between a chairman and a Secretary of State, because the chairman says "I am independent. I do

not think I shall tell him anything until I do what I am required by statute or by arrangement."
But I think that it was unusual, when the figure was so much greater, that the chairman of the Corporation and the Secretary of State did not both realise it at the time it was brought forward, particularly as both have emphasised that if there was to be any possibility of avoiding that figure of loss, action had to be taken.
What could action mean other than that mills would be closed down? To bring that about, the chairman had to have the support of the Secretary of State and the whole Government. Therefore, I should have thought that if proper relations existed information should have been passed to the Secretary of State as long ahead as possible.
As for the auditors, may I simply say this: there is a great difference between the auditors and accountants for a private enterprise firm under the Companies Act and for a nationalised industry in relation to a Government Department. Under the Companies Act, if a private firm or its auditors have any indication that the firm is in that position, it is then trading beyond its means and that must be declared. Therefore, they would be bound to make public disclosure. It may well be that it is not necessary for a nationalised industry to make public disclosure, but at any rate the Minister concerned should be warned at the earliest possible opportunity.
Therefore, if I have criticism to make it is that the informal relations should be so close that that information is passed automatically between Ministers and chairmen concerned.
I should now like to make my first general point. The indications from Ministers and the chairman have been that they expected an upturn. I believe that that is because economic thinking both in industry and in Government world-wide has still not grasped the nature of the economic crisis that has hit the world. They are still expecting us to pull out of a trade cycle.

Mr. Skinner: What about the Common Market?

Mr. Heath: There is no need for the hon. Gentleman to interrupt just because


I did not give way to him, but I shall give way to him now if he wishes.

Mr. Skinner: The right hon. Gentleman wants to remember a few points. First, he received the Charlemagne Prize supposedly when he dragged us into the Common Market, when he conned the British people in order to resolve the so-called unemployment and economic problem.
Secondly, on the question of accepting a Select Committee report, will the right hon. Gentleman explain why nearly the whole of the Tory Party, of which he is a member, refused to endorse the Select Committee report on the conduct of Members?

Mr. Heath: As the hon. Gentleman prides himself on his accuracy, I must remind him that he is wrong on both charges. First, I received the Charlemagne Prize when I failed to take Britain into Europe. Secondly, I did not say that the House should accept the Select Committee's report.

Mr. Skinner: The right hon. Gentleman did.

Mr. Heath: I said that the House should support the Committee in the exercise of its powers. That is quite different. I believe that when the Chairman of the Committee wants the documents, he should be supported in getting them.
I return to the nature of the economic crisis. It is very clearly discernible by looking at the graph of steel production. When the oil crisis hit the world in the autumn of 1973, the world was deprived of a massive amount of purchasing power. That is still the great economic danger facing the world.
The graph shows that in 1950 world steel consumption was 150 million tons. At the end of 1973 it was 450 million tons. It then immediately dropped—not over a period of recession, but immediately—by 80 million tons. That shows the impact of the oil crisis on the rest of the world. It has continued for these four years.
The point I wish to make—particularly in view of the fact that I understand that the Prime Minister is to meet the German Chancellor on Sunday evening—is that

until the world leaders recognise this fact and agree, by force of necessity, to act together to deal with it, we shall remain in this situation of world-wide mass unemployment. It follows that if that is to remain the situation, steel production will be damaged permanently by at least this amount. If that is to remain so, our projections for our own steel production must take account of it.
If, on the other hand, the world leaders reach an economic solution to this problem, we can again hope for an expanding world economy and can look forward to a future for our own steel production which would be much brighter than it is at present. When we come to our own problems, what we decide today must depend on whether the world leaders will deal with the worldwide economic problems in order to give the world an expanding economy again from which this country can take advantage. We must put ourselves and our steel industry in a position to take advantage of that situation. That is the crux of the matter.
I wish to make another point with regard to the history of steel from 1950, and not from 1967 as the Select Committee did. The figures illustrate quite clearly that in 1950 the United Kingdom produced 16·6 million tonnes of steel. In 1977 we produced 20·4 million tonnes, an increase of 23 per cent. over 27 years. The only other country near that level of increase was the United States. In 1950 the United States produced 87·8 million tonnes and in 1977, 113·1 million tonnes, an increase of 29 per cent. over 27 years. The United Kingdom has a State-owned industry and the United States is the greatest free enterprise country in the world. Both are at the bottom of the league table for meeting world demand in steel consumption over the last 27 years.
But let us look at the other countries. In 1950 Italy was producing 2·4 million tonnes. In 1977 it produced 23·3 million tonnes, an increase of 870 per cent. That was under a plan organised and backed financially by the Government. France produced 10–6 million tonnes in 1950 and 22·1 million tonnes in 1977, an increase of 108 per cent. That was backed by a plan introduced by Jean Monet and financed, where necessary, by State banking. In 1950 West Germany produced


12·1 million tonnes rising to 39 million tonnes in 1977, an increase of 222 per cent. It did so with the help of the Marshall Plan. We then come to Japan. In 1950 Japan produced 4.8 million tonnes and in 1977 102·4 million tonnes an increase of 2,030 per cent. It did so under a system in which steel production is private enterprise but backed by an industrial bank and the central banking system. [HON. MEMBERS: "The Government."] It is not entirely the Government. It is backed by a central system.
The point I wish to make is two-fold. First, with an increase in world consumption in 27 years from 150 million tonnes to 450 million tonnes, the United Kingdom has been able to increase its production by less than 4 million tonnes as its share of that world increase of 300 million tonnes. The United States has not done very much better. Yet the other countries have all had massive increases in production.
What we ought to be asking ourselves is not whether we should continue the argument about private ownership and State ownership. Rather, we should ask how we are to ensure that we manage what we have got and how we can get a larger share of the world market that is available.

Mr. Norman Atkinson: Mr. Norman Atkinson(Tottenham) rose—

Mr. Heath: I am sorry, but I want to be brief. I would have thought that what I have said was something with which the whole House could agree.
I again want to look at the steel industry's record over the last 27 years. Up to 1950 the industry was nationalised. Then the Conservative Party came to power and it was denationalised. The result of that period of nationalisationdenationalisation—was a reluctance to invest. We succeeded in denationalising the whole of the steel industry except Richard Thomas and Baldwin—for the reason that the money was not available in the City for it to be bought.
But under the Labour Government of 1964 to 1970 we had renationalisation and both finance and commerce said that this was immensely damaging. The Labour Government and their supporters must accept their lull share of the blame for that damage. We have seen that

public ownership has solved absolutely nothing. From the figures it can be seen that during the 1964–70 period Britain managed to achieve only $5·6 investment per tonne whereas Japan achieved $16—three times more than that achieved under the Labour Government's plan. The Labour Government bear a very heavy responsibility for this to-and-fro battle and for the lack of investment which the industry has had.
The Government must now take responsibility for having repudiated the proposals which the Conservatives put forward in the early 1973 White Paper. The Conservatives faced the fact that some very difficult decisions would have to be taken. I myself met the workers from Shotton in the Cabinet Room. It was very impressive. I was deeply impressed. I had a lot of sympathy with them because they said "We have had perfect industrial relations the whole time. Why then does our plant have to be shut down? Why, when we have nothing else in the area, do 5,000 or 6,000 men have to be made unemployed?". That was the position we had to face and we had to take a decision, unpleasant though it was.
But at the General Election the Labour Party said that it would not accept that decision. It wanted to increase steel production beyond what we Conservatives had proposed. The Labour Government received the Beswick Report and accepted that these closures would not take place. I would not altogether differ from the Secretary of State when he said that he does not want Select Committee reports used for political reasons. But he must be a little careful about his argument. Why in the 1974 General Election did the Labour Party say that it would not go ahead with the closures that had already been announced? Was there not something of a political reason in that decision?
I suggest that the Secretary of State should be a little careful when deploring the introduction of political reasons into the question of steel production. We took the decisions. Had the present Government adhered to those decisions, the British Steel Corporation would be in an infinitely better position today than it is.
The Leader of the House shakes his head. I shall tell him why. We took those decisions at a time of expanding


economy when people had some hope that there would be alternative jobs for them. What is more, action groups went out specifically to arrange that as far as possible with further industry. The Leader of the House could not do that today in Ebbw Vale, because there is a stagnant economy and he would find it most difficult to persuade any firm to replace the closures that now need to take place.

Mr. Norman Atkinson: I am grateful to the right hon. Gentleman—

Mr. Heath: There is no need to be grateful, because I have not given way.

Mr. Atkinson: Mr. Atkinson rose—

Mr. Speaker: Order. The right hon. Gentleman clearly wants to get on with his speech.

Mr. Atkinson: I ask the right hon. Member to be fair in his criticism, and to extend his analysis to the whole world of capitalist values when he refers to investment in British nationalised industries. He referred previously to production figures and not consumption figures. He should deal with consumption figures when relating his argument to British Steel. British Steel was unable to invest because its visible trade was in deficit. That is the idiocy of the system. Because of the public sector borrowing requirement, that investment was cut back. The right hon. Member should be honest.

Mr. Heath: With great respect to the hon. Member, exactly the reverse is the case. With a deficit on visible trade, home industry needs to expand in order to save imports. That is what has been happening.
Had the closures been made at the time proposed, the BSC would undoubtedly have been infinitely better off. As a result of this, over the last four years really vital investment has now been cut back. This is unavoidable because the money does not exist. All we want is an efficient steel industry, producing cheaply. That means new investment in major plants and the closing of older plants.
We are suffering a double loss. First, we are suffering the loss caused by the delay in closing those plants, and that four-year delay has meant a financial loss to the BSC. Secondly, we are suffering

a loss on capital investment where it is required.
There are those hon. Members who wish to be tough about our nationalised industries and some private industries as well. They tend to say that if a company is making a loss it should go to the wall. But we have seen in the past decade a decline in British industrial power. I find this absolutely terrifying.
We have seen the decline in the steel industry in the world position—in the people it employs and its effectiveness. We have seen the decline in the coalmining industry where there has been a very large drop in manpower and total production. At the same time we see that there are export markets that we should have captured. We have seen a decline in the shipbuilding industry, to an appalling extent, and in the ship repairing industry as well, at a time when world production is expanding just as world steel production is expanding. We have seen a decline in the British indigenous car industry in exactly the same way. There has also been a decline in the tool industry. Just in those five cases we see a decline in the basic British industries which are vital to the future of this country.
To those who say, "Let them go to the wall", I ask what will happen to our balance of trade as a result. We should have to import the steel we use. We are seeing what is happening to the car industry. Because of the decline, large numbers of cars from abroad are taking over our markets. We have seen the problems of machine tools. We have to import machine tools because we are not able to produce them. It is not sufficient to say that these companies should go to the wall.
The same people claim that other companies will spring up in place of those that do go to the wall. Where has this happened? We have lost 500,000 people from agriculture in the past 15 years because of mechanisation. There is every justification for that, but we have still not found jobs for those people. The Scots and the Welsh can tell us that because it is more evident in those countries.
All those concerned with industry know that to build a firm of any size takes at least a decade or two. Anyone who has had anything to do with regional policy knows the appalling number of


firms employing 250 or 300 people needed in a region to provide these jobs. We should not be arguing about public or private ownership of the steel industry—and I absolutely oppose any extension of public ownership because it has failed completely to answer any of our problems—but how to manage what we have got and have to live with.
I do not believe that the Select Committee has found the answers to the problems of the steel industry. Much more is required. I think that we should do some careful thinking about monitoring. Do we want the steel industry to monitor itself? Do we want the Department to do the monitoring and the Treasury? That is a triple monitoring system, plus the Select Committee. Surely we could get rid of at least one and possibly two of those. One has to control financing and this must come from the Government, unless the Government are prepared to tell the industry to get its money from the market. However, the market cannot always supply it, and if it can, it will cost more.
Where can we get adequate management for our nationalised industries? We have the utmost difficulty in persuading able young men to go into nationalised industries and to train to get to the top. All Governments have gone through this painful process. In future we must recognise the importance of making these industries efficient and of getting our share of world markets. This is what is really required from the machinery of government.
If our nationalised industries are to have the opportunity to run themselves we must forgo a lot of things that we have at this moment. We cannot have our industries independent from government if the Government are always to be held responsible in this House. As long as the Government are responsible, the industries will not have complete independence from Ministers, and Ministers must always be answerable to the House. All these things must be thought out. If we get more good management into the nationalised industries, we shall have better relations with the trade unions and a better chance of getting rid of overmanning and other problems that afflict us.
We should look beyond the immediate problems and irritations to the bigger

issues and open up the real problems of maintaining an efficient industrial base in this country which can hold its own with the rest of the world.

5.37 p.m.

Mr. Russell Kerr: With the exception of the right hon. Member for Sidcup (Mr. Heath), this debate has not been characterised by the degree of frankness—I do not want to include the Minister in my stricture—that we have a right to expect of a major debate in the House of Commons.
Everybody knows that the Leader of the Opposition and her hon. Friends are a lot less fervent than they now claim in their support of the activities of the Select Committee on Nationalised Industries which I have chaired for the past four years. To be blunt about it their sole reason for wanting to approve the three most recent reports on the steel industry published by my Committee is not in order to give us a well-deserved pat on the head, nor to encourage us to further endeavours on behalf of the House of Commons and the taxpayers. It is simply to embarrass the Government and, if possible, to try to remove them from office. One should not blame them for this lofty, albeit unlikely ambition. After all, they are Her Majesty's official Opposition and their duty is to oppose more or less regardless, whether in fair weather or foul, whether it makes sense or nonsense, whether the country will be harmed or not and whether one's slip is showing—as in this case—or not.
Whether the Queen is happy with their being such an Opposition we do not know. As a result of events that took place more than 300 years ago, she is able to avoid—and indeed must avoid—the spectacle on the Opposition Benches up with which some of us have had to put every day of our working lives and which causes many of us to mutter with well-meant fervour, as well as loyalty, "God Save the Queen".
However, let me revert to the matter in hand. [HON. MEMBERS: "Hear, hear".] The theory behind this brilliant parliamentary manoeuvre is painfully obvious. Put simply, it is that the majority on the Select Committee, namely the eight Labour Members, will be so embarrassed by the terms of the motion before us which, on one reading, means that we would have to vote against approving


our own reports, that they will be transfixed with fear at looking silly and will be forced either to vote with the Opposition tonight or abstain—or, just possibly, to go off and commit suicide as a consequence of failure to solve the dilemma!
I have news for Violet Elizabeth and her right hon. and hon. Friends: it ain't going to happen. My own hon. Friends will speak for themselves when they catch Mr. Speaker's eye, but it will come as no surprise to me if my fellow Labour Select Committee members decide to "fly the flag" tonight and vote with the Government—and to do that despite the pride we all feel in our three excellent reports which have been singled out for spurious commendation in this motion. But the point is that Labour Members on the Select Committee were not born yesterday—none of them. They recognise the siren calls of the right hon. Lady the Leader of the Opposition for what they are. Since we all come of clean, honest and God-fearing families, we are resolved to have nothing to do with such political low life. As we see it, the right hon. Lady has, politically speaking, to "get it honest". Her present somewhat disingenuous political ploy certainly is not that, nor anything like it.
This brings me—briefly, because no doubt the House has had a surfeit of steel politics in recent weeks—to what is actually said in the reports. The first thing we see—and we must keep this matter very much in mind as the argument develops—is that recent events in the British steel industry all took place against a backdrop of the most savage depression the world steel industry has known for many years.

Mr. Norman Tebbit: Get on with it.

Mr. Kerr: If the hon. Member for Chingford (Mr. Tebbit) wants to intervene, I shall allow him to do so. If he does not want to do so he should shut up. Recent events in the British Steel industry all took place—

Mr. Tebbit: Speed up.

Mr. Kerr: I shall speed up in my own good time. This is my speech, not somebody else's. I repeat that these events all took place against a backdrop of the most savage depression the world steel

industry has known for many years. No part of the steel industry in the West managed to escape, as my right hon. Friend the Secretary of State reminded us—not the United States, France, Germany or even Japan, which has made such remarkable technological progress in recent years. Our steel industry in the West in the past couple of years has been in a depressed state from which there are few signs that it is beginning to emerge.

Mr. Tebbit: Get to the point.

Mr. Frank Allaun: Be your age.

Mr. Kerr: Would the hon. polecat for Chingford shut up?

Mr. Speaker: Order. We have been having a serious debate. There is no need for anybody to take us away from the main subject. On both sides of the House below the Gangway there has been an exchange of complimentary remarks which would have been better left unsaid. I suggest that the House should now listen to the Chairman of the Select Committee, the hon. Member for Feltham and Heston (Mr. Kerr).

Mr. Kerr: Thank you, Mr. Speaker. I am capable of looking after myself, but I appreciate your help. Let me resume the story. The whole of the steel industry in the West over the past couple of years has been in a depressed state from which there are as yet few signs that it is beginning to emerge. The performance of the British steel industry in this period has been around the middle, when we think of the grisly league table of losses sustained. In other words, that performance has been not good but not bad. The figures in our report are there to support this view.
The second aspect of our report to which I should like to draw attention is the nature of the complaint we made in our report about Charles Villiers and the board of the British Steel Corporation, and to a much lesser extent the Industry Department and the Ministers concerned. We most certainly do not accuse any of them of villainy or anything remotely approaching it. Sir Charles, in several appearances before the Select Committee, impressed us all as a man of honour, ability and as a considerable fighter for what he believes are the rights of the Corporation. He is the sort of man I


would prefer to have beside me when shooting tigers in the jungle or—and this is factual—when parachuting into occupied territory in Jugoslavia in the last World War. He is a gentleman no doubt, but a tough cookie to boot.
As we saw it on the Select Committee, the worst thing that could be said against Sir Charles and his colleagues was that they were neglectful of their duties to the extent that they displayed a certain understandable reluctance to be the harbingers of bad news—that is to say, the virtual collapse of the steel market in the West—and were therefore reluctant to pass on to the Select Committee information, albeit perhaps unconfirmed, which it was important that the Select Committee should have had before publishing its report. As the House will recall, this led to certain difficulties and culminated in a parliamentary order from the Select Committe to Sir Charles, delivered by Miss Mary Frampton, as the Serjeant's Warrant Officer, which happily obtained the information we were lacking.
Perhaps I should also add that my right hon. Friend, the Secretary of State for Industry, who had also been somewhat critical of the Select Committee following the efficacious intervention of Miss Frampton, was the soul of courtesy and co-operation when he attended a subsequent meeting of the Committee. We have no complaint in that regard. The answers given to our further questions were frank and forthright, as indeed one would expect of the Secretary of State, and as a result we were able to publish our final report, as the House knows, in near-record time.
What indeed this last meeting with the Secretary of State did achieve was a quite impressive meeting of minds—to the extent that we saw some of the difficulties he faced in dealing with a fast deteriorating situation and he, for his part, saw that, far from being the agents of the devil, bent upon the destruction of the British steel industry, we were no less anxious than he to preserve and protect this great industry, then as now facing a critical situation, which could have resulted in the loss of hundreds of jobs and widspread distress of a kind that certainly no Socialist, such as myself, could contemplate for a moment.
But so far as the future of the steel industry itself is concerned, the Select Committee has set out its views clearly in the First and Second Reports and I am content to let my colleagues on our Sub-Committee B explain our case.
There are just three things I should like to say briefly. First, I should like to pay an unreserved tribute to all of my colleagues on the Committee. Even if some of us vote in different Lobbies tonight, we have throughout our inquiries worked and thought as a team and this has been our strength. Secondly, while it is too early to make a judgment on the Government's policy, since final decisions have still to be made, we stand by our views, as summarised in paragraphs 21 to 34 of the Second Report, and we shall have to judge the Government's policy in the light of this—always remembering, of course, that the world steel industry has been, and still is, passing through a major depression, the like of which has not be seen for many years.
Thirdly, there have been suggestions made, some of which have been swallowed even by good friends, that our reports are somehow anti-steelworker. This really is a total travesty of the truth, as anyone who reads the reports without preconceived prejudice can see. I would never be a party to a report which was hostile to the steel industry or the steelworker and anyone who suggests that Labour Members have been gullible and "sold a pup" by Opposition Members of the Committee simply does not understand how our Committee works-or what sort of person I am.
Much publicity, has been given to the supplying by BSC of information on the financial forecasts of the Corporation, which concerned our Fifth Report. Again, I am happy for the report to speak for us. The report has been generally welcomed by all sections of the Press. The Guardian, for example, said that its conclusions are
sharp, succinct and entirely to the point.
The Sun—no, not on page 3—said that the report is based on
evidence which the Government and the Steel Corporation fought desperately to avoid giving.
The Scotsman pays tribute to
the splendid investigating job done by the Committee.


The only people who appear to criticise our reports are several unnamed Ministers who are quoted as saying that the report is full of "inconsistency, inaccuracy and invention". However, they do not substantiate those charges. For what its worth, I vigorously refute that smear campaign, though I am sure that neither the Secretary of State nor the Minister of State played any part in it.
The only inaccuracy of which I am aware is the suggestion made in the Fifth Report in paragraph 17 that there was a meeting on 11th September between the Secretary of State and Sir Charles. Apparently, that was not the case. The conclusion was based on the reading of the answers to Questions 147 and 170, and on the natural assumption that as Sir Charles had decided that the Beswick plant closures should be brought forward, he would discuss that at once with the Secretary of State. If the meeting did not take place until later, the Committee's general line of argument is strengthened, not weakened.
My right hon. Friend the Prime Minister seemed to imply last week that we on the Select Committee were somehow exceeding our terms of reference in our findings. He said last Thursday that those who are on the sidelines always think that they know better than the players in the middle. I can speak only for myself but I am sure that my colleagues on both sides of the Committee will support me when I say, with great respect to my right hon. Friend, that we shall not be intimidated and prevented from doing our duty by remarks of that sort.
The proper relationship of Government, the nationalised industries and Parliament is of fundamental importance to Britain's future. After all, it is not only the Select Committee that has drawn attention to the bad relationships between Departments and industries. It was the NEDO report, itself commissioned by the Government, which made that one of its principal findings.
The Government's response has been delayed for too long, and my colleagues and I on the Committee will be examining the White Paper closely when it appears. Indeed, it is our duty to do so, whatever Ministers may say. Moreover. I believe that our investigation will

be welcomed by most of the nationalised industries.
Whether or not Sir Charles understands the proper role of Parliament and the Committee, other nationalised industry chairmen most certainly do. Sir Frank Price, chairman of the British Waterways Board, said of our inquiry into the Board:
We have welcomed the investigation by the Committee of the role of the Board and its work. We have found it refreshing to be able to explain our work, and the problems, to an independent body of Members of the House of Commons who are not bound by Departmental loyalties.
I also quote from Sir Daniel Pettit, chairman of the National Freight Corporation, who, incidentally, has had Freightliners taken from his corporation partly as a result of our recommendation. He said:
during the whole of these eight years I have been coming to meet the Select Committee, this is an experience of which we have been very proud, and something we have valued very much. Your treatment of us has always been extremely courteous, and my colleagues have always been very agreeably surprised at the welcome you have given us. That has not meant you have not been very pertinent and relevant in the questions you have asked.
He continued:
Your questions have been very shrewd, very demanding, very challenging. We have appreciated this very much indeed.
Thanks to the Select Committee, the relationship between Parliament and the nationalised industries is, on the whole, good. It will be the task of the Committee to try to ensure that relationships between Departments and the nationalised industries and, indeed, between Departments and the Committee, are equally good. Whatever by right hon. Friend the Prime Minister may think, we on the Committee are not mere spectators of some esoteric game. We have a vital part to play and we are determined to play it.
All the issues mentioned so far are important. Yet behind and above all the turmoil and heat engendered today lies a greater issue yet, the very future and credibility of the House of Commons itself as the watchdog of the people.
What is important is that the House is debating a great issue today with a proper knowledge of the facts. This is because a Committee of the House has stuck to its guns in using its powers to get at the truth, and to lay the facts before the House.
This is a victory, and a notable one at that, but unless the House is careful it may turn out to be a Pyrrhic victory. There are those in high places, including some of my right hon. Friends, who are hostile to the concept of Select Committees and to any extension of their powers. I believe that I speak for the vast majority of Back Benchers when I say that it is our task to ensure that Ministers seeking to deny necessary powers to a Select Committee like ours are overwhelmed by the strength of Back-Bench opinion, speaking on behalf of the people.
Ministerial accountability and responsibility must come to mean something at last. I believe that our Select Committee's work is welcomed by most thinking people. It will, I believe, be resisted only by the arrogant few who are convinced that Whitehall knows best.
I appeal to all Back Benchers, and especially my hon. Friends, to exert the proper rights of the House of Commons to scrutinise, to probe and to curb the powers of the Executive. In the days to come this struggle will be renewed and valiant men and true—women as well—will be needed more than ever. As a Select Committee of the House, we hope to play our full part in making sure that that is so.

5.58 p.m.

Sir Donald Kaberry: I shall be brief, but I must make it clear, lest there be any misapprehension in view of the speech of the hon. Member for Feltham and Heston (Mr. Kerr), that we are dealing with unanimous reports of 15 Members, some of whom, on the Government Benches, could never be described as being exactly in the Centre or to the Right of their party while some of those on the Opposition Benches likewise could never be described as being in the Centre or to the Left of their party. It was a broad-ranging and wide discussion upon a variety of matters brought before the Committee by the British Steel Corporation.
It is fair to say that it was about the longest investigation ever held by any Committee of the Select Committee on Nationalised Industries. The dates are worth mentioning. The Committee started taking evidence in April 1976 and finished in May 1977. It resumed in November

1977 and sat in January and February 1978. It produced the three unanimous reports that are now before the House.
It was not only the longest investigation; I should think that it was about the most expensive. The Committee had three technical advisers and a computerised system of recording evidence and documents. It spent a long time touring the countryside and elsewhere, if that is a kind way of putting it to conceal a number of matters.
In the ordinary way I suppose that the Committee would have reported early in 1977. It did not do so, for a variety of reasons. It was overtaken by events that showed that it required to have a vast amount of additional financial information that it felt had been denied to it.
There had been some 22 sessions of taking evidence. Evidence was taken from the former chairman of the Corporation, the present chairman, the independent steel manufacturers, the trade unions and a variety of others, including the Secretary of State and the Minister of State. No one can complain about the depth of the inquiry; persons can complain about its length and the quantity of paper consumed if they wish. There were 18 lengthy memoranda and 34 appendices to the minutes of evidence.
Lest it be forgotten I should put on record the fact that the House as well as the Committee owes a debt to the chairman of the Sub-Committee who presided over the whole of these inquiries. I pay tribute to the hon. Member for Dearne Valley (Mr. Wainwright), not because we are fellow-Yorkshiremen and stand foursquare before everything, but because of his courtesy and patience and the manner in which he permitted all witnesses who appeared before us to feel at their ease and to say that which they wished to say.
The reasons why the inquiry was started are set out clearly in the first paragraph of the First Report. There were all the indications of a downturn in the British Steel Corporation. There was all the evidence of losses being made. Therefore, the Committee decided to go into the whole matter and have a full, detailed report.
As we were concluding the report in the autumn of last year, it became abundantly clear that the Committee had been denied a vast amount of factual evidence which it should have had. Therefore, the


Committee was reconvened in November and the Second Report was prepared. That was followed by another reconvening of the Committee, with the taking of further evidence in January and February of this year, giving rise to what is now known as the Fifth Report.
I was delighted to hear the Secretary of State this afternoon say that he would give great consideration to the 35 separate recommendations set out by the Select Committee in the First Report. It would be terrible if, in a cross-party battle, those matters, which are all-party and for the benefit of the country as a whole, were to be lost sight of, because those 35 recommendations contain valuable suggestions about the manner in which the industry should proceed.
I turn to the Fifth Report, because that gives us the inquest upon the matters which had been denied us. It is abundantly clear, from the questions set out on pages 2, 3 and 4 with Sir Charles Villiers giving evidence, that there were 10 explicit occasions between 5th October 1976 and 14th November 1977 when figures that had been requested were not supplied, were delayed, or were put off. The answer to the question why that happened is simple. It may be that it is to the credit of Sir Charles himself. His answer was that he did not accept the figures; he did not believe them.
In answer to a question that I put to him, Sir Charles said:
The first evidence I can give to this Committee is when on the 8th December we met here and I was asked for these figures and I said that I did not really have great confidence in them.
He went on, in the midst of a long answer, to say:
I had cause on several occasions to say to the Secretary of State who will confirm this when you see him shortly that I found the past was littered with tombstones of numbers that were overtaken by events and I had very little belief that the figures then in front of me would not suffer the same fate.
There we have the strange position of a responsible chairman of a nationalised undertaking wishing to improve and to develop it but not accepting the figures supplied to him by his own staff, which he had reorganised.
Subsequently, I asked him the simple question that would affect us all in our daily lives:

Are you still relying upon the same team of advisers within the BSC who gave you figures which were extremely crude, and which you would not accept?
The answer was "Yes, I have the same advisers." That gave me, at any rate, great cause for concern.
I pass now to the Ministers, because the British Steel Corporation, through its officials, by correspondence or via Sir Charles Villiers, the chairman, on several occasions—specifically between August 1976 and 26th April 1977—gave figures which started with a projected profit which, a quarter or so later, turned to an anticipated loss of £55 million, increasing to £250 million, £350 million and, finally, £450 million. At the same time, Sir Charles was saying "I am not going to accept them. I am going to do battle to try to defeat those figures if I can."
None the less, on the evidence which is clearly set out, Sir Charles warned the Secretary of State about those losses, and the Secretary of State knew of those losses and, as it were, of Sir Charles's struggle to overcome them.
Perhaps the matter is best summed up in the answer to Question 193, on page 35 of the Fifth Report, when both Ministers said that they hoped that something would turn up. That is fair enough. But what should turn up? A price increase? A general restoration of trade in the world, in Europe, in this country?
I am sure that the whole House feels indebted to my right hon. Friend the Member for Sidcup (Mr. Heath) for illustrating so well this afternoon the difficulties prevailing in world trading conditions last year at the time when Ministers were discussing whether something would turn up. Of course, the Ministers were confronted by a variety of other problems.
The members of the Select Committee are as fully convinced as are the two Ministers of the human element involved in this matter—the jobs and the creation of work and a viable industry. One can understand hesitation in wanting to rush into some kind of decision. None the less, the BSC warned the Ministers on seven occasions of the losses, and the losses were increasing.
Surely, seeing the whole position, the Ministers ought to have been more responsive to the feel of the situation. The


longer they delayed taking any action, the worse the position must get, having been warned time after time that losses were mounting in that way.
What was wanted at that time, as now, was firm action to preserve whatever was possible of our great steel industry. Their best course would have been to have ensured the security of real jobs in the industry plus the continuance, with success, of all the steelworks which were viable propositions.
I think that the Ministers should not have waited and calmly accepted the figures given to them by BSC representatives without taking further advice upon them. There is an equal duty not only on the chairman of the British Steel Corporation to give, but on the Minister to demand information and to seek some solution to the problem.
I should explain what happened in the process of accumulating the matter which forms the body of these three unanimous reports. By carefully looking behind the curtain to see what was hidden, or lifting up the carpet to see what had been swept underneath, and demanding that we be given the figures and the information, we arrived at a ludicrous situation which called for serious and immediate action by the Government.
The Committee did not receive the information and the figures for which it had been asking until its meetings in January this year. Apparently, the Minister did not get or accept the full story of the accumulated losses. But I suppose that the whole situation is in some way rather academic, because we come back to the fact that the chairman of the BSC did not accept the figures. He did not believe what was put in front of him. That is, perhaps, the worst aspect of the whole matter.
The two Ministers sat there, somewhat complacently, hoping, as they said in their evidence, that something would turn up—

Mr. Varley: Will the hon. Gentleman tell me where I said that I hoped something would turn up? He is not quoting accurately from the report.

Sir D. Kaberry: It was an answer to Question 193. The Secretary of State said:

We certainly hoped that things would get better and there was a good deal of evidence at that time to suggest that they might get better.
In answer to the same question the Minister of State said:
Of course, when Sir Donald puts it as it is fair in one way to put it, that we were waiting for something to turn up, what we were waiting for, of course, like steel industries all over the world was for prices to turn up.
That may well be, but they were waiting for something to turn up and taking no positive action of any kind.
I want to deal with an aspect that raises the whole question referred to by my right hon. Friend the Member for Sidcup, which is extremely important for everyone in the House of Commons and in the country. I refer to the nature of the control that we wish to have over our nationalised industries. Do we want them to be commanded by a nominated president, a czar who will be rude to any Minister who does not answer a question, who will act as an independent fortress, removed from all political pressures and refuse to take any political subsidies? Or do we want the reverse—not a commanding height but an abysmal depth, where the nationalised industry chairman is under the thumb and the control of the Minister concerned? That is a question that has to be decided and answered.
It is to the credit of the Select Committee on Nationalised Industries that it took the initiative in this matter. In a report in December 1973, after we had had an across-the-board examination of capital investment in nationalised undertakings, we specifically recommended that the Government should institute a wide-ranging inquiry into the role of the nationalised industries in the economy and the way in which they should be controlled in future. We intended that to be, as it was, a challenge to the Government to say how they wanted the nationalised undertakings to be controlled. That was in December 1973 and, as the dawn came through in 1974—the murky, dim dawn—nothing happened, save for two General Elections.
Finally, in June 1975 the previous Government appointed NEDO to examine the whole problem. NEDO, to its credit, started work in July 1975 and in September 1976, I think, put out its report.
That report, based on a great deal of information which NEDO had considered, was rejected almost unanimously by the chairman of every nationalised industry. NEDO recommended a policy council, an intervention between the Minister and the board of the nationalised undertaking—but I need not go into that, because it is set out in the NEDO report. The Select Committee last year published all the replies from the nationalised industries' chairmen setting out why such a proposition would not be workable.
Now it is with the Government, and it is for the Government to decide. It is for the Government to issue their long-awaited White Paper saying how they want nationalised industries to be managed and controlled; whether they want them to be responsible to a Select Committee or to the Minister and, if so, how. Those are extremely important matters which have to be decided.
It was in that vacuum that the Select Committee went ahead and produced these three unanimous reports, which contain a great many extremely valuable suggestions. My colleagues on the Select Committee and I want to see a strong, viable British steel industry. The jobs, the wage earners, the product and the country demand it. I hope that the outcome of this debate, although it may be a little political at times, will produce that result.

6.16 p.m.

Mr. Geoffrey Robinson: I have read the reports of the Select Committee and the minutes of evidence, and I am gravely disturbed by them. I could not dissent more from the views which have been expressed by the right hon. Member for Leeds, North-East (Sir K. Joseph), who called the reports magisterial and the analysis profound. In my view the 35 recommendations could have been cobbled together quickly by any modestly competent group of management consultants. As for the analysis, in many key areas it is fundamentally wrong, as I shall demonstrate in the course of my few remarks.
In the Second and Fifth Reports the Select Committee makes specific charges. They are serious charges, which must be taken seriously. The Select Committee says that it is "very disturbed" and

"extremely concerned", and it refers to the "appalling situation" and "still more serious implications". Yes, the implications are very serious.
In essence, these are charges of incompetence against the BSC and its chairman, and against the Secretary of State for Industry, and charges of incompetence against his Department and lack of adequate relations between his Department and the BSC. The Secretary of State has already adequately dismissed the charges against his Department and against the relations between his Department and the BSC. I propose, therefore, to deal with the far more serious imputation made by the Select Committee on which judgment by the House is invited and on which the House is obliged to form a judgment. They are of such gravity, and posed in such stark terms, that we cannot avoid it. I quote from paragraph 6, on page viii of the Fifth Report:
Your Committee are content to leave it to the judgment of the House to decide, in the light of all the evidence whether the failure to supply information was a deliberate attempt to conceal the situation or a genuine misunderstanding of what was wanted.
This repeats the same imputation made in the Second Report.
My hon. Friend the Member for Feltham and Heston (Mr. Kerr) said that there was no deliberate attempt to conceal the situation and no deliberate attempt to mislead the Committee. For that question to be posed in that way and for an invitation to be given the House to express a view on it, some members of the Committee must presumably still be in some doubt. That charge, made outside the Chamber by persons who are not covered by the privileges accorded to the Chamber, if unsubstantiated, would prove actionable.
Sir Charles Villiers stands in no need of any attestations to his integrity from his personal or professional friends, although, having worked for him for three years on the Industrial Reorganisation Corporation, from 1968 to 1970, I feel obliged to state that I consider him to be a man of total integrity, a dedicated and devoted public servant. He is in no need of that testimony; I put it on record because I am pleased to do so. If members of the Committee agree, why is that question still in the report, and why is it repeated in the Fifth Report, having already appeared in the Second


Report? As I have said, Sir Charles does not need that.
The Committee was terribly misled, but the members of the Committee misled themselves. They misled themselves because they did not understand certain basic principles and practices of financial accounting. That is how they misled themselves, and I shall demonstrate that.
Let us turn to the first piece of evidence. This is the crucial document that they did not understand. They misunderstood it. It is the "Financial Statement and Budget Report 1977–78". Table 13 shows a net deficit on total internal resources of minus £50 million There is a footnote to that table which gives a precise and comprehensive definition of the elements that made up that estimate. In no one's mind, therefore, should there be any confusion.
Alas, that was not the case with the Select Committee. From their discussions with the BSC and the Chief Secretary to the Treasury last November, and again with the Secretary of State for Industry in December last year, the members of the Committee continually confused the deficit on internal resources—that is, the minus £50 million figure—with profit and loss.

Mr. Mike Thomas: Mr. Mike Thomasrose—

Mr. Robinson: If my hon. Friend will wait, I shall quote him. I shall willingly give way, although I would much rather give way to Members on the Opposition Benches than to my hon. Friends. I advise my hon. Friend to wait until I have read his words before he jumps to his feet.
To substantiate the point about this confusion, I have, regrettably, to quote my hon. Friend's words, for it was he who, in his relentless interrogation for precision paradoxically, so clearly brought out the total confusion in which he and other members of the Committee found themselves. I shall give him the exact reference. I quote my hon. Friend:
In the FSBR it
—this refers back, and it is quite clear from the context that it is the internally generated funds deficit—
is down to minus £50 million, and now it

—if the English language means anything, that "it" is also the deficit of the internally generated funds—
is down to a probable minus £500 million, which is a pretty massive turn-round in just 12 months. Yet the cash limits
—and this shows that my hon. Friend does not understand the position—
that the Chief Secretary in his wisdom allocated appear to be going to be adequate.
My hon. Friend continues:
I am trying to be complimentary. That seems to me to be a remarkable achievement on his and his colleagues' part.
Although the irony is rather heavy-handed, my hon. Friend had a point. The fact, much overlooked, is that the BSC has stayed within its cash limits. The achievement is not as remarkable as my hon. Friend seems to imply, though it shows quite a tight degree of financial control.
The point is that my hon. Friend has totally confused a figure of minus £50 million with another figure of minus £250 million. Therefore, instead of the turn around being, as my hon. Friend would suggest, one from minus £50 million to £500 million, a turn round of £450 million, there is a turn round of only £200 million. My hon. Friend's calculations are £200 million out.
My hon. Friend is not alone in this. It is on the record, and every Opposition Member who tried his hand at the same financial analysis made the same elementary accounting mistake of £200 million because he confused internally generated funds with profit and loss forecasts.

Mr. Mike Thomas: My hon. Friend makes a point that is true but irrelevant. I shall explain why that is so. The reason why it is true but irrelevant is that there are two occasions in the proceedings where I make the confusion in long sessions of verbal evidence and questioning, to which my hon. Friend has referred. There is no other point in the report—and there must be at least four or five dozen other points at which I refer to this sort of evidence and get it right, except for a small misunderstanding that was cleared up by the Chief Secretary to the Treasury about the way in which regional development grants are accounted—where this mistake is referred to or repeated where it is in any way critical. My hon. Friend totally fails to


answer the main charge. I put it to him that if he had been provided on 5th October 1976 with figures that were by then already approaching £300 million or £400 million out of the true figures and were six months out of date, and the people who provided him with those figures had not told him that they were six months out of date and had changed in the interim, would he not feel misled?

Mr. Robinson: Of course, the point is irrelevant when my hon. Friend is out by £200 million but, of course, it is a cause for massive concern when the BSC is out by that amount. That is the first point. Point No. 2—[Interruption.] I am being very fair. I want a debate across the Floor of the House. I am itching to give way to hon. Members on the Opposition Benches. But here we have the real professionals. They have more sense. They know they were wrong and that it was a massive elementary mistake. But until it was exposed, they could go on using a forecasting error much more easily made by the BSC in the teribly difficult circumstances in which it was operating, for the precisely party-political purposes that they intended. That is what this is about. I shall show that. [Interruption.] I am not nitpicking over £200 million. BSC was then only £200 million out. When my hon. Friend has checked again what he has just said, he will see that he is in the same confusion as he was before.

Mr. Norman Lamont: Mr. Norman Lamont(Kingston upon Thames)
rose—

Mr. Robinson: I am itching to give way, but I must get on.
Not only was this error made several times by all members of the Select Committee in the verbal evidence—the cut and thrust of discussion; but what is more, there is a similar error, although this time not across the table in the to-and-fro of debate, but written into the Second Report. It is another elementary error that is easily demonstrable. It shows again the total financial incompetence of those who wish to accuse the BSC and a public industry of incompetence. That is the irony, and this is what destroys them. I refer now to the Second Report, paragraph 10 on page 10.

My hon. Friend may not like it, but he must take it.

Mr. Norman Lamont: Mr. Norman Lamont rose—

Mr. Robinson: No, I shall not give way. Let me finish. Paragraph 10 says:
The most recent Government forecast
—[Interruption.] I want Opposition Members. They know who I want. Paragraph 10 says:
The most recent Government forecast (in the Financial Statement and Budget Report … of March 1977) implied a loss of £150 million.
Those are the words of the Second Report. Of course, it did nothing of the kind. The FSBR implied a loss—indeed it was derived from the basic assumption of a loss—of £250 million, as the Chief Secretary informed the Select Committee in December, before the report was produced. The letter is in the report as an appendix. I disagree with many of the Chief Secretary's economic policies but I understand that he is a qualified chartered accountant and I tend to believe his figures when put there. In its report, the Select Committee says that the FSBR
implied a loss of £150 million.
Then it goes on to say—I think I quote verbatim, but it is from memory—that the situation is even more confused because the Chief Secretary, in his letter, says that there was going to be a loss of £250 million. The Chief Secretary was right. That was the figure. How was it, therefore, that the Committee was again out, confused and wrong by another £100 million in the written report? In fact, it is not hard to see why.

Mr. Tim Renton: Mr. Tim Renton rose—

Mr. Robinson: The Committee's recommendations included an estimate in the £150 million for depreciation. The members of the Committee got that far, but they had forgotten the very clear footnote to Table 13 in the FSBR, which gave the elements that made up the deficit of £50 million also including regional development grant. But in July 1976, the same precise point was made to them when Mr. Monty Finniston was chairman and Mr. Driscoll was finance director. There was no excuse for overlooking that. The situation was made dramatically worse because they misunderstood it by £200 million to start


with, in the investigations, and by a further £100 million later. I shall explain the relevance that I believe I can attach to these fundamental and persistent misunderstandings which take up so large a part of the minutes of evidence.

Mr. Tim Renton: I have listened with astonishment to the hon. Member. I thought that he was more intelligent. It is much more fun for him to be answered by his own hon. Friends, and I can well understand why the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) is looking so thoroughly irritated with him. Perhaps I may suggest to the hon. Member that he actually reads the letter from the Chief Secretary. If he does that, he will see that the Chief Secretary says:
By way of illustration, outline financing tables compatible with a cash limit of £950 million and showing the kind of savings which could be made to offset a worsening in deficit from £250 million to £500 million might be:
He then goes on to draw two analogies—two examples of how the British Steel Corporation, by cutting down on capital investment could still stay within the cash limits of £950 million even if its losses had deteriorated from £250 million to £500 million.

Mr. Robinson: Mr. Robinson rose—

Mr. Deputy Speaker: The hon. Gentleman said that he was seeking interventions. He has now got one.

Mr. Renton: The hon. Member for Coventry, North-West (Mr. Robinson) is like an animated jack-in-the-box, popping up and down.

Mr. Robinson: Mr. Robinson rose—

Mr. Deputy Speaker: Order. There can be only one hon. Gentleman on his feet at one time. The hon. Gentleman had given way, and I understand there was an intervention from the hon. Member for Mid-Sussex (Mr. Renton).

Mr. Renton: There is nothing in the letter from the Chief Secretary that refers to the actual loss being forecast by British Steel at the time of the questions to which his hon. Friend is referring. Furthermore, there is nothing—[Interruption.]

Mr. Deputy Speaker: Order. The hon. Gentleman may have an opportunity of catching the eye of the Chair in due course.

Mr. Robinson: I am grateful to you. Mr. Deputy Speaker. I was seeking interventions, not speeches—trying to get away from the fundamental weaknesses of the two reports which produce an analysis which would have failed the hon. Gentleman even in an intermediate examination of the Institute of Chartered Accountants. I understand that he was a director of a certain company which also got into difficulty and had to be restructured in 1974; possibly there was difficulty in distinguishing between cash flow and profit. He left that board. I understand, and at the self same time joined a Select Committee. I would not mind his joining a Select Committee if he had learnt something from his previous experience at Vavasseur, which got into a confusion over cash flow and profit and loss. He is still confusing the two. All that was by way of illustration.
I come back to my point that I do not think that what the report went on to say was correct and I base my statement that the Select Committee should have known this on the evidence given to the Sub-Committee by the Chief Secretary, which related to evidence that he gave which appeared to indicate, apart from the publication of the financial statement and budget report, that the Government expected the Corporation to make a loss of £250 million. That is the derivation that the Select Committee should have made, had it not committed the fundamental error of forgetting in its calculations the cash contributed from regional development grants. I hope I have demonstrated to the House the fundamental financial incompetence to make analyses on the part of those who took part in the debate. I draw three conclusions. First, the errors which the Committee made, though elementary, were of such magnitude and so central to its charges of incompetence against British Steel and the Department of Industry that they render those irresponsible accusations totally invalid. All they demonstrate is the Committee's own incompetence and it was this very reason which led the Committee to think it was being misled, and made it send for information when that was already at its disposal.

Mr. Kinnock: We did not have the information.

Mr. Robinson: Such incompetence casts general doubt on the validity of the work of the Committee as a whole.
Thirdly, and possibly most important, the Committee profoundly misunderstood figures to such an extent on such key issues as to create a hostile atmosphere which gave way to the paranoia and suspicion which at times prevailed. Anybody who reads the minutes will come to that conclusion. It seems to me that the Select Committee thought it was on to a Watergate-type cover-up between the British Steel Corporation and the Department of Industry. Sadly, for it, the missing tapes are not missing tapes at all, but are misunderstood figures which have blown up in the faces of members of the Select Committee. It is like putting in a third-rate chartered accountant to sort out the quandary of a secondary bank's collapse. These statements are irreparably damaging to the reputation of those Opposition Members who sat on the Committee.
It is not really surprising that mistakes were made when one considers the pre-sure of time under which the Committee continued to sit. The first time it met, Sir Charles, in his presentation of the policies of the Corporation, was stopped in his tracks because it had lasted for 17 minutes. In an 18 months' inquiry was that too much? In total, up to last summer's First Report, the chairman of the Steel Corporation had given evidence at three meetings and, apart from one meeting covering non-executive directors, had had three hours to respond to questions on every aspect of the affairs of BSC.
Specifically, on the quality of the minutes of evidence leading to the Fifth Report, no hon. Member comes out well. It reads like a confused jumble of patently hostile questions grasshopping over time scales and subjects, with no attempt to deal with the real issue. It is quite clear that because of time pressures throughout the sitting anything like a full debate was impossible. On no fewer than five occasions the Chairman of the Select Committee attempted to call the discussion to a halt. It is really not surprising that mistakes were made. I do not believe that any Committee can possibly or effectively operate under those circumstances. This matter cannot be left by exposing the Committe's financial incompetence or by casting

upon the report the contempt and derision that I believe much of it deserves, because the real damage that was done by those members was seen in the newspaper headlines "The Guilty Men"—including the chairman of the British Steel Corporation, the Secretary of State and the Minister of State. They are not the guilty men. The guilty men were those Opposition Members who stirred up grossly exaggerated and factually incorrect charges just because they did not understand the figures—those Members who committed themselves to paranoid suspicion about figures which they were given, which led to Press statements inspired by the party opposite.
We have to consider whether it was correct that the whole of the Select Committee's proceedings went as they did. Under common law, under which we normally live, every party has a full opportunity to present his case and to be cross-examined. But the important point here is that the Select Committee acted as judge, jury and prosecuting counsel, with no rules of evidence. These procedures remind us of nothing less than the Court of Star Chamber which was abolished in 1641.

Dr. Jeremy Bray: Dr. Jeremy Bray(Motherwell and Wishaw) rose—

Mr. Robinson: No, I shall not give way. I have given way more than enough.

Mr. Deputy Speaker (Mr. Oscar Murton): Order. If the hon. Gentleman does not wish to give way he cannot be pressed to do so.

Dr. Bray: I understand my hon. Friend's motivation and the validity of some of his comments, but in order to avoid misunderstanding, he should make clear that he is making his speech on his own initiative and not at the request of Sir Charles Villiers.

Mr. Robinson: I am grateful for that intervention. Unlike Tory Members, I understand the figures and am able to interpret them and demonstrate the total incompetence of the Select Committee.
I am making my speech entirely on my own behalf. I believe that the Select Committee has brought great discredit on itself and on the British Steel Corporation, and has done nothing to further


the real interests of parliamentary government.
To the Select Committee on Procedure I say "Look very carefully at the status and operating procedures of Select Committees in general and abolish the Select Committee on Nationalised Industries, in particular, very quickly."

6.41 p.m.

Mr. Richard Wainwright: Liberal Members consider that these three robust and serious reports—whatever view one takes of their 40 or so recommendations—should be fully debated by the House in their proper context and, in our view, the context for debating Select Committee reports, especially on such a weighty subject, is when the Government have tabled a full reply by way of a White Paper.
Regardless of the fact that we are having today's debate, we believe that it would be wrong to face the House with new legislation concerning the BSC until a White Paper has been published. If, as the hon. Member for Coventry, North-West (Mr. Robinson) has attempted to demonstrate in the light of his successful industrial experience, there are serious flaws in the accountancy reasoning in one of the reports, that is all the more reason for a White Paper to analyse all that has been said.

Mr. John Mendelson: I apologise for interrupting the hon. Gentleman's arguments so early. He knows that I would not normally do so, but it is precisely for the reasons that he has reasonably stated that I have urged the House that the Government should be allowed an opportunity, as with any other Select Committee report, to prepare their answer and publish a White Paper that we could debate rather than allowing this misuse of procedure by the Leader of the Opposition for shoddy political purposes.

Mr. Wainwright: I am glad to have that endorsement which shows that, not for the first time, Colne Valley and Penistone are at one on a parliamentary matter.
There seems to have been some confusion between the House approving the Committee's recommendations and paying serious attention to the evidence and the analysis produced by the Committee. Even if none of the recommendations

turned out to deserve implementation, the analysis—even with its faults—and the massive amount of evidence, which is of enormous importance to such a vital industry, must soon have the proper attention of the House in the light of a Government reply published at the earliest possible opportunity. My right hon. and hon. Friends and I regard the debate today as premature in that respect.
Select Committees are of immense, and, I hope, rapidly growing importance to Parliament, and the steel industry presents unique dilemmas for Parliament and the country. It is a manufacturing industry dependent upon being competitive in world markets and, in the next few years, probably dependent on managing to export at least one-third of its total output in difficult world circumstances. Yet it is under attempted parliamentary control which raises appalling problems of procedure. Most hon. Members regard the industry as vital—certainly my party thinks it is vital—and, in many respects, as a promising industry in the European context, but it will be desperately hard put to break even, let alone make a profit, in the next decade.
As one of the three advisers to the Select Committee wrote in the New Statesman on 3rd March:
there is no ground for foreseeing the BSC as anything other than a drain on public expenditure for a generation to come.
No one disputes that, regardless of profit or loss, the capital requirement of a modern competitive steel industry, over and above any profit which might be generated, will be enormous in its demands on this country's strictly limited resources.
Perhaps the admirably low key in which the greater part of this debate has been conducted, with interruptions, is due to the fact that the House is faced with its own vomit. It is, as the right hon. Member for Sidcup (Mr. Heath) pointed out so clearly, the vomit of having to deal with a fundamental manufacturing industry which has been treated as a political shuttlecock and has been taken in and out of public ownership over the years.
There is also the appalling dilemma, which no one has yet solved, of having a manufacturing industry in world-wide competition, yet in public ownership which is dependent upon funds voted by


Parliament and therefore liable to parliamentary control and investigation.
I applaud the energy and diligence of the Select Committee, or at least some of its members, in trying to square the circle and get information on behalf of the House about the state of the industry and its future prospects, but it is clear that it has not been able to square the circle. The dilemma is that the information that would be required for a searching examination of the industry could be given only at the peril of undermining the Corporation's commercial success.
I know that there are arrangements for concealing in reports certain figures and details, but while that device may be all right for the Public Accounts Committee and some others, it does not meet the case of trying to investigate a competitive manufacturing industry in world markets. If one respected commercial confidentiality one would have to asterisk enormous chunks of a Committee's recommendations.

Mr. Mike Thomas: The amount of asterisking in the report is extremely small and relates only to forward financial forecasts for 1979 onwards and to some specific things said in evidence—amounting to no more than a few sentences.
These matters were agreed between the Secretary of State, in the case of his evidence, and the Committee and Sir Charles Villiers, in the case of his evidence, and the Committee. The Committee acceded at every point to requests for confidentiality to be preserved for commercial purposes.
We were not faced with the problem that the hon. Gentleman mentions. We were able to do the job properly and to respect commercial confidentiality.

Mr. Wainwright: I am sure that the Committee tried hard, but this is a circle which cannot be squared under the present arrangements. While the Committee was robust in demanding certain information and sticking up for the rights of Parliament, its reports fudged some of the issues and the House has still not been frankly presented with the pertinent difficulty of operating a modern steel industry, which we must have, in a manner that will not be an intolerable drain upon public resources.
The Committee must have been overawed—I know I would have been—by the appalling task of delving into the affairs of a strictly commercial organisation that is trying to face up to American anti-dumping regulations and competition from up and coming steel countries such as Brazil, Korea and Taiwan, in the glare of publicity for its operating accounts Britain's competitors, especially in the developing countries which have no elaborate press or television, must be chuckling that so much trading information is at risk of public exposure in Britain. That is a dilemma for which I can find no solution but it should be ventilated.

Mr. Ted Leadbitter: I agree that the objectives which the hon. Member for Colne Valley is beginning to develop would have been enhanced if we had not had this debate at all because it is interfering with commercial considerations. It would have been wiser to wait for the Government's response to the reports and for the statement which we know that the Government intend to make before Easter.

Mr. Wainwright: I am grateful for all the support from hon. Members but it is prolonging my speech. We believe that this debate is premature.
I turn to the reasons why we shall oppose the amendment tabled by the Conservative sector of the Opposition. We cannot approve these three reports when we have not had the Government's published reply. Perhaps the Government's reply will be unconvincing, unless they take over the accounting skills of the hon. Member for Coventry, North-West. Perhaps they will do that. Whether or not the Government's reply is convincing, I cannot believe that the Select Committee regards as a compliment some hon. Members rushing in to agree with it before hearing the other side of the dialogue. No one respects a friend who, during an argument with a third person, rushes in and falls over himself to say that his friend has won the argument before the other person has begun to reply. The proper response which the House owes to the important functions of Select Committees is to demand from the Government not a perfunctory, point scoring, sharp, Civil Service reply but a thorough reply in detail to the recommendation and the analysis.

Mr. Michael Marshall: I deliberately tried not to intervene because I hope to contribute to the debate but the hon. Member for Colne Valley (Mr. Wainwright) is presenting a strong argument. Does he recognise that the Select Committee reported unanimously three times on the importance of having this debate before the statement. The Government made it clear that they were not willing to have such a debate. This is the only chance that we have to play our part.

Mr. Wainwright: Statements must come when things actually happen. We do not say that statements to the House should be held up because documents are not provided but we say that legislation should not be laid before the House until the House has had a full reply.
We should have found ourselves unable to do anything but vote against a Government amendment which sought to pre-empt the full reply which they owe to the House by attempting a defence against these three reports today. We support the Select Committee system and the interrogatory system of democratic control. We do not believe that the Order Paper is the proper place for the Government to defend themselves against Select Committee reports. If the Government had attempted in an amendment to import any kind of attack on the Committee or any implied defence of the Government we should have voted against that as well as against the Tory motion.
The Select Committee has dug out the evidence industriously and it is on the whole useful. There is an appalling slump in the world of which there seems to be no end. The whole BSC strategy, therefore, has to be reviewed, and as little regard as possible paid to political or electoral interest. It is no good saying that the large numbers of people employed in steel plants do not present electoral temptations. This is something which can be brought up only in a proper debate.
If the steel industry is well managed and not subjected to undue political interference it has a future, particularly in the European context. We see no reason why it should not supply much of the Common Market's needs for many forms of manufactured steel. We start with a

lead over some other member States. In order that this can take place the industry is entitled to demand at least a stable political environment in which these matters are discussed more in the spirit of today's debate than in the spirit of past debates involved with nationalisation statutes. I hope that when we have the Government's reply the House will rise to the occasion and deal with the dialogue between the Select Committee and the Government in an appropriate way.

6.56 p.m.

Mr. Roy Hughes: We all agree that our publicly owned steel industry is going through a difficult period. Its losses of over £500 million are bound to cause grave concern to the House, the Government and, of course, the BSC. They also seriously concern the workers in the industry who obtain their livelihoods from steel.
We know that there are mitigating factors. Over many years the industry has been subjected to appalling fluctuations. The present slump has also affected other places such as Germany, Scandinavia, Belgium, Italy and France. The BSC is not unique in its present difficulty, but I agree that there is no room for complacency.
I have always been a wholehearted supporter of the principle of a publicly owned steel industry. But I confess that over the years I have been disappointed with its performance. I was disappointed before the present slump and before the divine revelations of the Select Committee. In structure and performance the steel industry can be summed up as being too bureaucratic. It shows a lack of initiative and its labour relations have not been good.
I have always found the poor industrial relations in the industry difficult to understand. That is one of the reasons why I often took Sir Monty Finniston to task. The poor industrial relations seemed to reflect not so much on the workers or trade unions as on the management.
I welcome the tribute paid this afternoon by my hon. Friend the Member for Feltham and Heston (Mr. Kerr), the Chairman of the Select Committee, to Sir Charles Villiers. My impression is that he is an honourable man. A year or two ago he was handed the poisoned chalice. It is easy to see the defects in the industry.
I have spoken in a number of debates on this subject. I have persistently pointed to defects. I have proposed more industrial democracy. A massive expansion of that is now necessary, and the major trade unions in the industry go along with that principle. For too long we have had to endure this sham arrangement of so-called worker directors.
There should be greater accountability to this House by all our publicly owned industries. I regret having to say this against my own Government, but they have been most remiss in the number of steel debates that they have arranged in the last four years. Our questioning procedures should be sharpened so that we can ask questions more directly about the performance and defects of our public industries. Why should all that be left to the civil servants when there is so much talk about more open government?
It is against this background that we should see the Select Committee's recommendations. It has had a difficult job to do, but in one form or another those recommendations contain proposals for massive redundancies, plant closures, the contraction of capacity and cut-backs in investment. Again I regret having to say this but to me that is the traditional reaction of the old iron masters: when the industry is in difficulty, contract and sack the workers. Such recommendations are not in the best interests of the industry or the country.

Mr. Mike Thomas: That is not very fair, is it?

Mr. Hughes: For example, it is quite illogical to plan production on the assumption that the present slump period is the norm—

Mr. Mike Thomas: We did not do that.

Mr. Hughes: The right hon. Member for Leeds, North-East (Sir K. Joseph) referred to Sir Charles Villiers' explanation of the situation. He said that the losses were due 40 per cent. to the slump and 40 per cent. to over-manning. But at present we are producing only 17 million tonnes of steel a year when we could be turning out 24 million tonnes. Logically, therefore, productivity would be very much higher if the industry were working to capacity and turning out 24 million

tonnes a year. That is why I say that the Select Committee is basing its recommendations on the present situation, and on the basis of that situation is calling for the sacking of so many people.

Mr. Mike Thomas: The Select Committee did not base its recommendations on that presupposition, nor did it call for the sacking of large numbers of people.

Mr. Hughes: I am sure that my hon. Friend will, if he can, make his own speech about these matters. The Select Committee has spoken of phasing redundancies over five years, and one would therefore expect the redundancies to be massive. Is the number to be 40,000, 20,000 or what? This is the sort of airy-fairy nonsense peddled by the right hon. Member for Leeds, North-East.
The Select Committee says that the unions should be allowed to negotiate, but that if there is no agreement there will be cuts in investment. That is rather like the judge in the Western film who tells the prisoner "You are guilty but you will have a fair trial."
Another remarkable recommendation is that higher productivity should not be encouraged by the introduction of new facilities. Surely the whole lesson of British manufacturing industry in the past 30 years is that it has been essentially under-capitalised, and that is why we have been losing out in world markets such as Japan and West Germany—

Mr. Kinnock: That is exactly what we said.

Mr. Hughes: Wales is particularly involved with steel. It is very much a part of the livelihood of the Principality Take the Shotton works in North Wales. As the right hon. Member for Sidcup (Mr. Heath) pointed out, it has had a remarkable industrial relations record over the years, and that is worth a great deal. The plant was reprieved until the early 1980s, but paragraph 146 of the Select Committee's recommendations brings the works once more back into the centre of the stage. When the report talks of introducing new industry to the area it seems to ignore the fact that 1.5 million people are unemployed in Britain.
The general-secretary of the Iron and Steel Trades Confederation, Mr. Bill Sirs,


wrote to me on 26th January about the Shotton works. He said:
I was saddened to read within the committee report that whereas there is no government or B.S.C. intention to close down Shot-ton works, the Select Committee have made special mention and brought it back into the area of consideration for closure. This is a very unsatisfactory state of affairs in my view.
Then there was the news item which hit the headlines a few weeks ago which referred to the possibility of Sir Charles Villiers being put in the Tower. That item came at a very difficult time in the history of the industry and it can have done little good either to the workers or to the whole principle of public ownership.

Mr. Russell Kerr: On a point of order. Will my hon. Friend please correct the impression that we were trying to put Sir Charles in the Tower? We employed an accepted means by which Parliament tries to exercise necessary authority to get information or documents. It has nothing to do with trying to lock up poor old Charlie.

Mr. Deputy Speaker: That is hardly a point of order, but it is a point of interest.

Mr. Hughes: The Select Committee was certainly responsible for what happened and the Press reports certainly gave that impression.

Mr. Russell Kerr: Whose fault is that but the Press?

Mr. Hughes: My hon. Friend the Member for Coventry, North-West (Mr. Robinson) gave us a financial analysis. He has great experience in these matters. The Government and the Corporation expected an upturn in the industry, not the slump that eventually prevailed.
Let me quote here from another gentleman who knows the steel industry. This is from Mr. John Boyd, general secretary of the engineering section of the AUEW. For many years he was chairman of the TUC steel committee and he spent a long time as workman and a trade union representative in the steel industry. Referring to the affair concerning Sir Charles Villiers, he says:
All this nonsense that facts and figures have been withheld is all so much silly superficiality against the serious economic facts, which even a blind man can see; hence, the best service the Government could give the

Steel Industry is to declare redundant, if they can, the present Select Committee, and encourage the BSC and the Unions to plan together how best our British Steel Industry can weather the present economic recession, and emerge a more efficient cost-conscious industry.

Mr. Kinnock: Will my hon. Friend give way?

Mr. Hughes: No, I shall not give way. I have read the extract from the February journal of the AUEW.
Besides the recommendations in the Select Committee about chopping the industry, I feel, as someone with some trade union experience, that the report can only strengthen the hand of the British Steel Corporation in its dealings with the trade unions in the industry. We know that if ever the Conservative Party got into power again, it would like to chop off what it would imagine to be the more lucrative sections of the industry and leave behind the basic sectors either to be subsidised by the State or to rely on imports from overseas. I know how damaging this could be to our economy in Wales. We certainly need at the present time of depression—I feel that the Keynesian analysis is still valid—to re-equip our industries and be ready for the upturn, however long delayed it may be.

Mr. Kinnock: That is exactly what we said.

Mr. Hughes: I am sure that my hon. Friend will be able to catch the eye of the Chair. My hon. Friends have already made out a case in the Select Committee report as well.
There are imports into this country of between 4 million and 5 million tonnes at present. The Government should do something about import controls, not only in this sector but in others.
What does the Select Committee say about these matters? It says that imports are a protection against the abuses of market power by our publicly owned steel industry. What nonsense this is! It has been peddled repeatedly by the right hon. Member for Leeds, North-East, but it can lead only to putting more of our people on the dole.
Some of us resent the influence of the EEC over our publicly owned steel industry and the EEC's activities in regard to competition. But the Committee is


satisfied with the measure of EEC control. It also wants strengthening legislation to be introduced in this Parliament so that there is no abuse of monopoly power by the publicly owned BSC.
We nationalised steel in this country, but, according to the report, we should be kind to private enterprise. The fact is that BSC has never had a monopoly.

Mr. Kinnock: Of course it has not.

Mr. Hughes: I wish that my hon. Friend the Member for Bedwellty would shut up. He has had plenty of time to make his speeches on television.
The BSC has never had a monopoly. We are witnessing the private sector gaining an increasing foothold. One would have thought that the Select Committee, with a Labour majority, would have considered at least the principle of total public ownership of the industry besides a massive expansion of industrial democracy. However, there has hardly been a squeak on issues of this sort.

Mr. Edwin Wainwright: My hon. Friend must realise that the Sub-Committees are a combination of Members from both sides of the House. Therefore, it is difficult for a Sub-Committee to take one side on nationalisation. Many of us believe in it, but on an issue of this kind surely my hon. Friend does not expect a Sub-Committee to have power to introduce nationalisation.

Mr. Hughes: According to the advocates of the recommendations in the report, the report was a great analysis in depth of the whole problem and of what the solutions for the future of the steel industry in this country should be.
The trade unions certainly deplore these reports. So does the Scottish TUC, the Welsh TUC and the Labour Party in Wales. If any hon. Member requires the written evidence of that, I have it here and I can provide photocopies of the correspondence to bear out what I am saying.
The solutions put forward are essentially the philosophy of the United Steel companies organisation. It is alleged that the principal architect of the reports is none other than the hon. Member for Arundel (Mr. Marshall), who was an employee of that company for 15 years.

Mr. Hardy: will my hon. Friend give way?

Mr. Hughes: No.

Mr. Michael Marshall: The hon. Gentleman gives me too much credit. We all worked on the Committee. We produced unanimous reports and all played our part. I pay tribute to all of my colleagues, and I regret that I cannot confirm what the hon. Member has just said.

Mr. Hardy: Mr. Hardy
rose—

Mr. Hughes: I shall not give way to my hon. Friend. I appreciate the reticence of the hon. Member for Arundel in this matter, but we are fairly well informed on these issues. I served on the Sub-Committee and I appreciate, as my hon. Friend the Member for Feltham and Heston, who was Chairman of Sub-Committee B, said, that it is of an all-party nature. Nevertheless, the present Labour Members serving on it have no excuse, because they are essentially in a majority.
I am sorry to have to say that the reports offer no satisfactory solution of the problems of the industry. The reports should be consigned to the dustbin.

7.17 p.m.

Mr. Michael Marshall: I am glad to have the opportunity of following the speech of the hon. Member for Newport (Mr. Hughes) in the light of one or two comments that he made. I have had the opportunity to talk with the hon. Gentleman on a number of occasions and I know of his deep interest in the industry. Today he seemed to put too much of a political gloss on his speech. I spent most of my working life in a major part of the old private sector, and I entered the House four years ago with a particular interest in seeing what could be done to help the steel industry in the future.
The industry is in a grievous state. This is a world-wide problem. The Secretary of State is right about that. Every hon. Member is concerned about the matter. We do ourselves no credit if we try to avoid the basic issues. We are all realistic, and it is understandable that the Secretary of State and the Minister of State should want to get the matter on to party political lines.

Mr. John Mendelson: Why are we having this debate today?

Mr. Marshall: I shall come back to the hon. Gentleman's point.
The Secretary of State has talked at Question Time and on other occasions about Tory plots, and so on. I came into the House because I was opposed to the nationalisation of the steel industry. It undermined the job that I had, and I felt passionately about it. But I have come to the conclusion over the years that there is no way in which the steel industry can thrive by an attempt to denationalise at this point.
Having reached that view, I have to think what is the best way to go ahead. Over the last two years I have come to believe that there is a very serious and important role to be played by Select Committees such as our Select Committee, in trying to find common ground to carry the steel industry forward.
I understand what the hon. Member for Penistone (Mr. Mendelson) is saying. I understand that in a perfect world it would be nice if we could wait until the Government replied and provided time for debate. But, as I said to the hon. Member for Colne Valley (Mr. Wainwright), it has been made clear that the Government were not prepared to give time before the statement, which is what the Select Committee unanimously recommended.
The Secretary of State said that he expected to come forward with legislation after Easter. I hope that we shall hear more about that in the Minister's reply. In those circumstances, unless the Opposition had provided time we would not have had a debate before we had the major statement, which has been long awaited after eight or nine months of crisis, followed immediately by legislation, which many of us believe will be confined to the limit of borrowing and perhaps financial reconstruction. Those are the likely moves. None of us should look a gift horse in the mouth. We have an opportunity for debate and a great deal of sensible use has been made of this opportunity today.

Mr. Mike Thomas: I do not quarrel with the hon. Gentleman or with his right hon. and hon. Friends when they argue that there should be a debate. I believe

that my right hon. and hon. Friends were wrong not to give time for a debate. But I take issue with the hon. Gentleman on the following matter. With me, he signed the motion to take note of our reports. Why is he now, in support of his Front Bench colleagues, going for a motion to approve, which can only have a political purpose?

Mr. Marshall: The hon. Gentleman is a wily fox. I have appreciated his skills over recent years. He will have to wait for my peroration to find out my intentions.
The basic matter here is the balance of the argument. I am willing to concede that no Select Committee trying to look at the steel industry, with its massive complications and problems, can get everything 100 per cent. right.
The hon. Member for Coventry, North-West (Mr. Robinson), who made an intemperate speech, which was the only non-constructive contribution today, missed the point. It must be recognised that the argument has been going on for the past two years because of the British Steel Corporation's massive increase in indebtedness, which is now up to £4 billion. I am confident that the Corporation will be coming to us for an increase of borrowings over that limit and perhaps for financial reconstruction. The House has had placed upon it the responsibility to act as banker.
As my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) pointed out, one of the most crucial sets of figures, quickly disavowed, was the whole five-year cash flow forecast on which the future of the Corporation was based when borrowings went up from £2 billion to £4 billion. The disavowal of those figures and Sir Charles Villiers's refusal, despite repeated requests, to give updated versions of those figures, first triggered off the Committee's concern.
On top of that, when we were putting our report together last summer we found that the whole basis of our conclusions was invalidated within two months because the predictions that our own advisers were making through a computer study were proving to be more accurate than the BSC's. The BSC and Ministers were apparently making no warning noises. That is why we reconvened, and not only reconvened but felt


it our duty to return to the House to give all hon. Members an opportunity of sharing in considering what seems to be almost a matter of make or break for the Corporation.
Therefore, I regret to say that when we talk about misleading figures we have had a long history of them. Ministers have shown a notable reluctance to give any more than they have been asked for. The Secretary of State will persistently say "I was not asked for this or that". He knows full well that for a long period there was the feeling that we were not receiving accurate figures—a feeling heightened time and time again by our own computer study, based on some first-class work by three top-class advisers.
It is all very well for the hon. Member for Coventry, North-West to talk about the advisers as he did—

Mr. Robinson: Mr. Robinson
rose—

Mr. Marshall: The hon. Gentleman has said his piece. He has done his mudslinging, and now I shall give him some replies.
One of our advisers was a former managing director of Round Oak, the 50–50 public-private organisation of British Steel and the private sector. He is a first-class industrial consultant and a leading academic. All three advisers are people with knowledge in these matters, and they helped us greatly.
I hope that it will not embarrass Labour Members on the Committee when I say that they were clearly under tremendous pressure as the reports came out. They felt that they must stick to their guns, because that was the only way to see a solution to the industry's problems, which is what we should be addressing our minds to.
There is a general feeling of malaise, of uncertainty about operating results, about the way in which the investment programme has been allowed simply to dwindle in a piecemeal fashion. I take one specific problem that we highlighted in our report. We made the point that the provision of cash limits was in some senses helpful but was a crude measure, and that the Corporation was robbing its capital account to pay for wages, raw materials, and so on. That means that

once more the investment programme is being delayed.
We must try to reach a clear understanding of what is at stake in this delay. The background has been described, and I shall not go over it in detail. It is a fact that between 1968 and 1973, throughout the process of centralisation, decentralisation, centralisation and now the current decentralisation, there has been a massive discontent in the Corporation's management circles, and much concern has been felt by the trade unions.
I hope that when they introduce legislation after Easter the Government will take on board the matters that we have urged upon them. I hope that they will examine the iron and steel legislation, because it has been shown time and time again to be totally inadequate to the needs of the relationship between BSC, the Department of Industry and the House. I could give many examples, but I quote only the way in which the consultations between Ministers and the Chairman of BSC led Sir Charles, in my view fairly, to argue the difficulty of serving two masters. But if the House is to act as banker it will, regrettably, have to take a continuing interest. That is why a stronger Select Committee, rather than the reverse, is needed.
When the Iron and Steel (Amendment) Bill was before us, the acceleration of indebtedness was the only warning signal that the House had. On average, the increase in take-up of borrowing at £1 billion a year has led us to the point at which, as the Chief Secretary to the Treasury pointed out in evidence to us, the level of indebtedness plus losses is being met at the expense of many other things, such as schools, houses, hospitals, and rate support grant. The problem has reached such a size that we must do what we can to put it right.
What can we do? There are many obvious short-term measures, emergency moves of the kind that BSC has already taken generally. But we must consider the Department of Industry's attitude throughout the whole period. Perhaps it is unfair that we have had to go after the BSC, because, although Ministers take departmental responsibility, in a relationship of the kind with which we are dealing there is a vested interest in keeping matters as quiet and cosy as possible.
Ministers have pointed to the change in the market, but, as we pointed out at the beginning of our First Report, the crisis is not simply a matter of the collapse of the market recently. I urge hon. Members to read again the first paragraph of our First Report, in which we said that The Economist had pointed out that the collapse of the market began a year before 22nd November 1975.
We want answers to questions covering the whole three-year period. What sort of contingency plans did the Corporation and the Department consider? What short-term opportunities are open to them? We all accept that there is no way in which the 1973 10-year development strategy to raise output from 26 million tonnes to 36 million tonnes is valid. What is the new priority? What is the variation in the investment programme?
Those are the matters which we should be talking about today and Ministers should be addressing themselves to. I find it sad that they should have got into a frame of mind in which they seem to regard themselves as being in an embattled position below the parapet. Like my right hon. Friend the Member for Sidcup (Mr. Heath), I hope that they can look rather wider and beyond the immediate problems and the personality clash that has conic out of the report.
In many parts of its report the Select Committee points to the cost of delay. It is the burden of our argument that, sadly, the cost will be far greater in jobs and cutbacks in investment than it would have been if action had been taken sooner. The report almost entirely underlines the validity of the investment policy proposed in the 10-year strategy. It has tied the provision of capital to the agreed demanning programmes.
It is rubbish for hon. Members to talk about anyone relishing the prospect of seeing these people out of work. All hon. Members would be delighted if the British Steel Corporation could retain its employment at 200,000. It would be one fewer problem for this House. But we recognise that throughout the world other great industries have streamlined.
The Minister used the example of the great Bethlehem Steel situation which in the first nine months was losing as much as the British Steel Corporation but

which began to show a profit in the fourth quarter and had work for 5,000 people. But here we are still waiting for a statement. At the end of three years of the collapse of the steel industry we are no further forward as to what is going to happen.
I am willing to concede that many people who have been criticised have reasonable excuses which they could fairly bring forward. I believe that Sir Charles Villiers was much too quick to nail himself to the cross, because he had the difficulty of taking over from a predecessor and he inherited forecasts that he might not like. He has problems within his own top management which are well known outside the British Steel Corporation.
In that situation it is even more important that Ministers should try to be much franker, not only with the Select Committee but with the House, as well as to hon. Members who are willing to play a constructive part and who should know the facts.
There is an air of uncertainty. I recall that during the proceedings of the Select Committee the hon. Member for Bedwellty (Mr. Kinnock) spoke of the problems felt by his constituents as a result of continuing uncertainty. The lack of certainty and delay has been one of the most worrying aspects in this regard. The lack of clear-cut ideas within the Department is reflected when Ministers speak at the Dispatch Box. If there is one disease in the British Steel Corporation it is that of delay. The whole argument has been based on the Beswick plants, whose closures have been postponed. No one has said whether they will be retained. With one or two marginal exceptions, such as Shotton, the Beswick proposals in general have simply been postponed.
I remember my hon. Friend the Member for Flint, West (Sir A. Meyer) pointing out how many of the people in his constituency who worked in Shotton were moving away. That is the effect which one gets when uncertainty feeds upon itself.
There are two or three points from the report that I should like to emphasise although they will not be easy to implement. But the situation will be improved if we try to see what has happened. First,


Ministers must be willing to put the costs and the full effect of social decisions in writing and seek reimbursement by the Treasury to the Corporation. The effect of the Beswick plans has cost the British Steel Corporation about £100 million a year. Something ought to be done so that the rest of its activities, including many of its successful parts, can be judged fairly and more widely.
I go more widely than the report. This is a personal view. The report suggests that the provision of capital must be tied to a phased reduction of overmanning. But in my mind there is a strong case for trying to make sure that the provision of capital takes into account the good industrial relations and track record. We must change the climate in which the Corporation operates. As hon. Members of the Select Committee will know, when we went to Sheffield and Scunthorpe we were asked—and we gave no answer—what we were doing to stop the effect of political investment decisions. That has been a problem which has created the maximum uncertainty and the maximum of doubt about the future of this great industry.
The role of the Select Committee has been reinforced and strengthened by this inquiry. At present it seems to be the only early warning system that this House has. In the report, we have tried to be a general early warning system. We have tried to pinpoint the problems, in the hope that the whole House will be part of the tough, difficult but necessary decisions that are required if we are to save this great industry.

7.35 p.m.

Mr. David Lambie: One of the most telling speeches today has been that of the right hon. Member for Sidcup (Mr. Heath). I found myself in agreement with most of what he said. I was beginning to wonder whether he was in competition with the leader of the Labour Party or the leader of the Conservative Party. I believe that he completely demolished the speech of the right hon. Member for Leeds, North East (Sir K. Joseph). When one looks at both sides of the Opposition Gangway one realises that the first-class Tories are to the right of the Gangway and that the second-class Tories are leading the Conservative Party at the present.
I also listened with interest to the speech of my hon. Friend the Member for Feltham and Heston (Mr. Kerr), the Chairman of the Select Committee. I accept that he was not and nor were my hon. Friends who were Members of the Select Committee gulled by the Tory members of that Committee. I accept that they tried their best to put within the recommendations things which they thought would be of value to the Labour Government and the Labour Party.
Reading through the minutes of evidence, and the reports of the various meetings of the Select Committee, reminded me of the Bible—that any fool or rogue could use any argument from it to justify the principles in which he believed. As a Scotsman it reminded me of the works of Robert Burns. On 25th January every year the Labour Party claims Burns as its own and it can justify it, as does the Tory Party. The Tory Party can produce evidence that he was a great imperialist, but we can produce evidence to prove that he was a great internationalist.
I accept that my hon. Friends who were Members of the Committee were not gulled. My criticism is of the way in which the report was used by the media, the television and the Press, immediately it was published. My hon. Friend the Member for Coventry, North-West (Mr. Robinson) highlighted this fact by holding up the next day's issue of the Daily Mail which contained a direct attack on the British Steel Corporation and a direct attack on the Labour Government. It is in that respect that my hon. Friends must be answerable, not only to this House but to the Labour and trade union movement.
I am glad that the Government have not been stampeded into a decision on the future of the British steel industry, despite the fact that the Select Committee recommended that they should publish their review of the situation as quickly as possible as a matter of urgency. I am glad that the Government did not take a decision last July.
During my time as a Member of Parliament I have sat through many chairmen of the British Steel Corporation. Chairmen come and go, but the people who run the British Steel Corporation are aware that Black Bob is still there. I should like to see Black


Bob being put in the Tower instead of Sir Charles Villiers.
I am glad that the Government were not stampeded on 24th November when certain elements within the British Steel Corporation were putting out leaks to the television and the commentators about a crisis within the Corporation and trying to pre-empt a reasonable decision on social and political grounds. I hope that the Government will take that into account before they produce their final statement on the present review.
I congratulate Government Ministers on standing up against these pressures and I hope that when we get the decision—which I hope will be soon—it will be one that can be justified to the steelworkers, the trade union and people who have voted Labour all their lives. I hope that it will be a decision taken on social and political grounds, as well as economic grounds.
I was very disturbed by the way the argument has gone in the House tonight. We have suffered too much at the hands of chartered accountants in this House, and there have been too many chartered accountants speaking today. One of the faults of British industry is that it is dominated by too many bookkeepers and not enough people with the training and skills to run industry. I hope that the Government will take account of other considerations.
In its report the Select Committee asked that the Government or the BSC should look at the future of certain of the Beswick plants. One of the Beswick plants is the Glengarnock steelworks in my constituency. Following the publication of the Beswick Report, we were given a reasonable outlook for steelmaking at Glengarnock. We were told that we would lose our open-hearth furnaces. Steel plants cannot exist by making steel in open-hearth furnaces, and ours were to be phased out by 1980. By then we would have steel coming from Hunterston to Glengarnock. We accepted that there would be redundancies, but we believed that some of these redundant workers would move nine miles down the road to the new and developing complex at Hunterston. We believed that we would have a satisfactory and modern steel complex giving viable employment to the majority of these workers.
Now we see the recommendation of the Select Committee that the British Steel Corporation should go around to steel plants and ask workers whether they are willing to sell their jobs. We had the agreement at East Moors only today, and some people say that the East Moors workers have sold out. They sold out because their steelworks was to be closed. The BSC, however, is trying to make men sell out their jobs in other plants. No steelworker has the right to sell out the jobs of young boys who are still in school.
We are told that the sell-out at East Moors will cost the BSC £9 million—that is, £3,000 per worker. That amount will not even buy a decent family car. To obtain this average amount a worker must be unemployed for two years. We are not talking about £17,000 or £20,000—figures that have been bandied about for selling the jobs of boys still in school: we are talking about £3,000 on average. I hope that the steel workers will resist these blandishments by the BSC.
I hope that the Government will stop this agreement between the BSC and the unions to go around among workers urging them to sell the jobs of people who still could have a viable future in a modern steelmaking plant. I hope that the Government will not accept the recommendation of the Select Committee and will continue with the recommendations of the Beswick Report.
All we need for a viable steelworks at Glengarnock is a reheating furnace. This would give us one of the most viable and most competitive plants in the whole BSC empire. Later steel will come from Hunterston—a distance of nine miles—and this will make us more competitive as a part of the Hunterston complex. This in turn will make us one of the most viable and modern plants in the whole of Western Europe.
Another recommendation from the Select Committee was that the Government should look at the investment programme and the plans made in the Beswick Report again. The report says that areas like Hunterston are in jeopardy. I cannot accept that.

Mr. Kinnock: The reference to Hunterston is in the summary on the first page of the Second Report. It refers to Press rumours that were circulating in the early autumn of last year. We did not


pursue that and we drew no conclusions from it.

Mr. Lambie: In dealing with that point the Second Report says:
In addition, the proposals for electric are furnaces at Ravenscraig and Hunterston in Scotland, and at Shelton in the Midlands, and for the eventual construction of an integrated steelworks at Hunterston were said to be in jeopardy.

Mr. Mike Thomas: By the Press.

Mr. Lambie: That does not come out in reading the report. I do not accept that the Select Committee came out fairly and squarely against the BSC and the Government looking at the commitments to the investment programme in the Beswick Report. Investment at Hunterston is in jeopardy.
What has happened following Beswick? We have a terminal at Hunterston which will receive its first bulk carrier soon. Hunterston is the best deep-water harbour in Europe but the steel will be coming into an area where we cannot utilise its advantages and assets in view of the threatened cut-back in the investment programme.
The BSC intends to mothball the plans for electric are furnaces at Hunterston and Ravenscraig. There are those of us who have taken part in the Hunterston campaign since 1968. We have gone through Secretary of State after Secretary of State, Government after Government, and continuous opposition from the Tories, the Liberals and the SNP. Four years later, we find that a Select Committee on which there are Labour Members of Parliament is attempting to put us back to square one.

Mr. Mike Thomas: I understand my hon. Friend's depth of feeling and appreciate it. However, he must not misrepresent the Select Committee. In paragraph 21 we say that there are three principal lines of action open to the Government to take in order to deal with the present situation. It is unarguable that something must be done, and one of the things on the shopping list k the reconsideration of the investment programme. There is no mention of Hunterston other than that.

Mr. Lambie: My hon. Friend has just defined what I am saying. The Select

Committee Report lists the places where investment must be examined. It says, as a direct quote, that Hunterston is in jeopardy.

Mr. Mike Thomas: I apologise for intervening again, but my hon. Friend surely is not arguing that in the present situation every piece of proposed investment by the BSC is able to go ahead. That cannot be the case.

Mr. Lambie: No, I am not arguing that. I am arguing that those of us who are interested in the future of steelmaking in Scotland realise that the investment at Hunterston must go ahead, because if that does not happen there will be no future for the Scottish steelmaking industry.
There is now an ore terminal and two direct reduction plants which are nearly completed. However, the Corporation says that it will not go ahead with investment on electric are furnaces. The next stage should lie in making Hunterston a modern, integrated, green field site. I hope that the Government will not accept the Corporation's recommendation or the recommendation of the Select Committee and will carry on with the investment at Hunterston.
The fault of the Corporation, and indeed of British industry in general, is that we have never invested at the right time. Surely this is the time to invest in the Corporation and to make it into a modern and viable industry. We are still importing 5 million tonnes of steel per year and, even if we had import controls, the Corporation would still have to honour many of those orders because they were made at a period when there was a world steel shortage. In order to maintain its orders, the BSC signed contracts to take steel from overseas, and it is still committed to those contracts.
I hope that the Labour Government will continue with the investment plans that are now in hand. It would be a disaster for the Labour Government, particularly in Scotland, to stop investing in Hunterston. Hunterston marks a psychological point in Scotland. We have been fighting for it for nearly 10 years. The Labour Government gave us the beginning of that complex, and they cannot take it away from us.
The Carnock Valley area in my constituency has 14 per cent. unemployment, but at the nearest employment exchange to Hunterston the figure is as high as 15 per cent. If the steelworks at Glengarnock close, the direct unemployment rate in my constituency will leap from 14 to 35 per cent. But let us remember that the Corporation wants to close the plant immediately. That would create direct unemployment of 35 per cent. and indirect unemployment of up to 45 per cent. in the service industries.
No Labour Government can take a decision—whether it be advocated by the BSC, the Tories or certain Select Committee Members—to close the Glengarnock steelworks creating 45 per cent unemployment in my constituency. Many of us have voted Labour all our lives and we expected advantages to be gained for workers because of the existence of that Labour Government. Therefore, I ask the Government to continue their good faith, to retain the Glengarnock plant, and to honour the recommendations contained in the Beswick Report.

7.55 p.m.

Mr. Douglas Crawford: I wish to correct one matter mentioned by the hon. Member for Central Ayrshire (Mr. Lambie). I wish to inform him that the SNP supports the integrated project at Hunterston.

Mr. Lambie: I am sorry to intervene so early in the hon. Gentleman's remarks. I know that he has not been a member of the SNP for long. We appreciate that not very long ago he was undertaking work as a research officer in the Tory Conservative Party. The hon. Gentleman certainly knows nothing about the history of Hunterston. A prospective candidate for the SNP gave evidence against the steel development at Hunterston at the public inquiry. Therefore, if the hon. Gentleman has been converted, it is a late conversion.

Mr. Crawford: I am trying to put it on record—I do not wish to go into detail about what the hon. Member for Central Ayrshire said—that the SNP is in favour of developments at Hunterston.

Mr. Norman Buchan: It is now.

Mr. Crawford: The hon. Member for Renfrewshire, West (Mr. Buchan) has not been present for very long.

Mr. William Ross: Mr. William Ross (Kilmarnock) rose—

Mr. Crawford: I am not giving way; I am trying to start my speech.

Mr. William Ross: What my hon. Friend the Member for Central Ayrshire (Mr. Lambie) said was quite right.

Mr. Crawford: We would not have been debating this matter today—

Dr. Bray: Before the hon. Gentleman sits down, will he allow me to intervene?

Mr. Crawford: I only wish that the people of Scotland could be here to see this performance. I understand the Labour Party's difficulties, because they are bound to suffer at the hands of the SNP at the next election. I would not have mentioned this point had it not been for the barracking in my speech. The hon. Member for Central Ayrshire has been urging the Labour Government to take action, but they have not done so. I agree with the hon. Gentleman on the need to consider the social as well as the economic consequences of closure.
The report, as the Secretary of State for Industry said, serves a useful function. I agree entirely with the comments on page 83 of the report and proceedings of the Committee, which recommended that:
Direct experience of industry, if not of the Corporation, is essential for civil servants who take some part in the Corporation's affairs and that the period of assignment of civil servants to the relevant divisions of Her Majesty's Treasury and the Department of Industry should be extended.
But on one vital matter the Select Committee does not go far enough. It does not dwell on the Gargantuan size of the Corporation. I wish to suggest to the House that business enterprises can grow to such an extent that economies of scale become diseconomies of scale, that the tendency towards centralised management becomes a tendency towards fossilised management, and that there is a need to break up these latter-day dinosaurs. I understand that is what Michael Edwardes is trying to achieve at British Leyland.
The Select Committee failed to point out that one reason why BSC losses were so slow in manifesting themselves was the fact that, just as it took a great deal of time for the dinosaur's brain to realise that its tail was being cut off, so it took


the centralised management of the Corporation far too long to realise what was happening financially in its geographically scattered manufacturing outposts.
It is all very well for the Select Committee to say that reporting and accountability procedures should be tightened. What it should have advocated was the dividing up of the Corporation into more manageable units of direction, management and administration. That would produce more effective, and certainly much earlier, financial warning systems, a corresponding ability to adjust investment and production in the light of financial performance and a corresponding speedier reaction to market trends, and much better accountancy systems in the plants of the much smaller segments of the BSC, so that profitable plants would not have to be closed.
Hence, the SNP put forward a policy providing for the establishment of a Scottish steel corporation. I suggest that a work force of 20,000 people employed in the steel industry in Scotland is a more manageable unit than that which the Corporation now controls, amounting to 200,000 people.
The argument about profitable plants being closed is especially relevant. I wish to quote Mr. Arthur Bell, Scottish organiser of the ISTC, as reported in The Scotsman of 25th February. He said that BSC was using "dirty criminal tactics" to disillusion employees at Glengarnock. The only pity is that Mr. Bell and his English counterpart, Bill Sirs, wrote only to Scottish Labour Members of Parliament and not to all Scottish Members of Parliament about this matter. However, we have now been asked by Mr. Sirs for SNP support tonight, so I suppose it is better to have that move late rather than not at all.
What the trade unions fail to realise is that they have been powerless to stop profitable works being closed. It is a fact that the rod mill at Dalziel was closed in 1970 despite the fact that in the last year of its life it made a profit of £500,000. Those are not my figures; they are ISTC figures. There is no question that Hallside and Dalziel as a whole are profitable by any standards.
What the Select Committee failed to point out is that the establishment of

a Scottish steel corporation would encourage the growth and development of an integrated multi-product industry in Scotland. I quote the Scottish Council, which on 8th February 1978 stated:
that within the Scottish investment programme, the trend should be towards the production of higher quality and special steels and that increasing concentration on steel of special qualities would not only broaden the base of the Scottish steel industry but would have beneficial effects on the growth of existing manufacturing companies and on the establishment of new ventures in the area
We in the SNP say Amen to that.

Mr. Buchan: Mr. Buchan rose—

Mr. Crawford: No. The hon. Gentleman has not been in the Chamber for much of the debate.

Mr. Buchan: Mr. Buchan rose—

Mr. Crawford: No. I shall not give way. Time is short.
The Scottish Council also said—it is not an SNP front organisation—
that for the present and short run, Scottish steel output should be maintained at not less than its traditional proportion of steel production and, on completion of current developments, Scotland's output should be at least 15 per cent, of total BSC steel-making output in efficient plants. This proportion of steel can be made as efficiently in Scotland as in any other area of the United Kingdom.
The Scottish Council went on to advocate
that investment by the BSC in Scotland should be at least 15 per cent. of the Corporation's overall figure in order to safeguard the future growth and efficiency of the Scottish element of BSC.
A similar line was taken by the economic and industrial development committee of the Strathclyde Region in December 1977.
Words are one thing and deeds are another. Here is what is happening. There is a delay in any starting date—this is what we heard from the hon. Member for Central Ayrshire—for the construction of the integrated complex at Hunterston. Clyde iron works at Toll Cross-Cambuslang has been left to die. Dalziel is once again under threat, even though it has an important role as the main producer of special quality heavy plates.

Dr. Bray: That is the most utter rubbish. It has a definite future and it is getting its full share of orders.

Mr. Crawford: I am delighted to hear that. I am delighted that that is on the record.
Reference has already been made to Glengarnock. The story can be repeated throughout the rest of Scotland.
I turn to the point made by the Daily Record on 24th November 1977. I hope that the hon. Member for Central Ayrshire, although he is not totally on my side, will take note. James Rutterson, who is employed at Craigneuk, was quoted in the Daily Record of 24th November as saying:
The work will go to England—it always does. We will be left with no work and no hope. For me that means one thing—I lose my dignity. That's all—but that's everything.
On the same day in the same paper William Bowman, who works at Ravenscraig and faces the prospect of the dole, was reported as saying
What do I tell my kids? There are a thousand high-flown words I could use. But I am going to sum it up in a sentence—I was promised the earth and then chucked on the scrap heap.

Dr. Bray: Dr. Bray rose—

Mr. Crawford: I shall give way a little later.

Mr. Alexander Fletcher: The hon. Gentleman must not make these assertions.

Mr. Crawford: I am quoting from the Daily Record of 24th November. I am quoting what was said by Mr. Rutterson and Mr. Bowman.

Dr. Bray: The hon. Gentleman must do better than quote casual remarks quoted by a popular newspaper. It is a very good newspaper but perhaps its source was not very reliable. The hon. Gentleman should not mislead the House in these matters. The Craigneuk foundry is the subject of major development work. The bar mill at Craigneuk is getting the same share of orders as the brand new works at Thrybergh. The Ravenscraig works will be one of the only two completely integrated and fully planned steelworks in the country.

Mr. Crawford: I do not know what relevance that has to the comments made by the two gentlemen whose comments were reported in the Daily Record.

Mr. Hardy: Disgraceful!

Mr. Crawford: I accept that the Secretary of State and the Minister of State

are aware of the social consequences. However, I am not sure whether that can be said of the right hon. Member for Leeds, North-East (Sir K. Joseph), bearing in mind the contents of his speech in opening the debate on behalf of the Opposition. I am afraid that what now confronts us is what the centralised management of the steel industry has done.
The Conservatives, with their calls for further public expenditure cuts, would make matters even worse. They have failed to come forward with any proposals. All they say is that they approve of the Select Committee's recommendations. Which works will they close? Will they close Hallside, Craigneuk, Dalziel, Glen garnock, Clydebridge or Tollcross? I shall be interested to hear which steelworks in Scotland the Conservatives would like to close. It may be that we shall be told when the Conservative spokesman replies.
Serious though the steel recession world-wide and in Britain is, this is no time to panic. Planned investments should go ahead. There should be no wholesale massacre of older plants that are needed to maintain a balanced industry that is able to respond flexibly to demand. That is especially true for Scotland today. The main cause of the crisis is the recession world-wide and in Britain. This always hits steel harder, later and longer than any other industry.
Whatever the justification of the BSC's commercial policies, the appropriate reaction to the commercial results is not to cut back investment projects needed to raise the efficiency and balance up the capacity of the BSC in Scotland. The EEC Commissioner Davignon has already warned the steel industry against cutting investment.
Specifically the electric arcs should go ahead at Hunterston and Ravenscraig, the electric are capacity at Hallside should be expanded, secondary steel making should be expanded at Ravenscraig, and the necessary de-bottlenecking should be undertaken at Gartcosh. Unless we get over the phase of being half developed and half obsolete, we shall never compete.
Those are not my words but the words of the hon. Member for Motherwell and Wishaw (Dr. Bray), in a paper to the Scottish Parliamentary Labour Party on


7th November 1977. I agree with those words and I hope that we go ahead on that basis.
The time has come to tell the people of Scotland that the Labour Government are trying but failing, because we are living with a Gargantuan British Steel Corporation. I ask the Minister for an assurance—the hon. Member for Central Ayrshire did not ask for this assurance but I do—on Hunterston and Glengarnock.
There is no way in which my party can support the Tory motion to approve the Select Committee report, which states, on pages 18 and 19,
These decisions should, however, be subject to a clearly defined specific reduction in the size of the workforce in each of the next five years…
The fulfilment of the above recommendation is the necessary pre-requisite for the continued capital development expenditure".
There is no way in which my party can stand up for pages 18 and 19 of the report.

Mr. Alexander Fletcher: Who is going to use the surplus steel?

Mr. Crawford: I am interested in the hon. Gentleman's question. His right hon. Friend the Member for Leeds, North-East said that he wanted to cut back. Which steelworks would the Tories back?
The hon. Member for Paisley (Mr. Robertson) said on the Third Reading of the Scotland Bill—it was a moving speech—"Let our people go". I extend that to steel. I say that we should let the Scottish steel industry be controlled by the people of Scotland. They should be given control of the industry. Control should go back to those who are employed in the industry in Scotland. That would ensure prosperity and continuity of employment for them. I suggest that it would be totally impossible for the people in Scotland to make a bigger mess of their steel industry than the mess that has been created by Westminster.

8.9 p.m.

Mr. R. B. Cant: It has been an extremely interesting debate in which many high level principles have been discussed. I should be less than human if I did not try to follow

the dictum of Dr. Johnson that criticism is best illustrated by example and say a few words about the steelworkers in my constituency. I am sorry that my hon. Friend the Member for Central Ayrshire (Mr. Lambie) has left the Chamber as I should have liked to take up the spirit of his contribution, even though I could not summon up similar passion.
One of the features that has emerged from the debate is the simple fact that we know that the British Steel Corporation has enormous problems. No one disputes that. We also accent from the Members of the Select Committee that something has to be done. However, we should not become bemused in our attempts to find a solution to the massive problems of the Corporation. We should not become bemused with the esoterics of financial control—whether on 6th or 7th October a deficit of £X million or £Y million would confront the BSC.
The BSC faces problems other than those of financial control. It may be that we shall have to pay greater attention in future to plants which are not of maximum, or I suppose I should say jumbo, size. Big is not always either the most beautiful or the best. Since both before and after the Beswick review massive plants have run into problems. The diseconomies have become almost frightening in many ways, whether we refer to commercial confidence, industrial relations or the quality of the product.
I am on the verge of making an attack on my hon. Friend the Member for Brigg and Scunthorpe (Mr. Ellis), of which I have given him due warning. These great firms, the jewels in the BSC crown, are making mounting losses. They were supposed to have all the answers to the low-cost quality product. I know nothing about accountancy. In financial matters I am totally innumerate. Some of these new low-cost plants, which in some instances took a couple of years to get off the ground after they had been completed, are making tremendous losses.

Mr. John Ellis: Will my hon. Friend give way?

Mr. Cant: Just let me pursue this matter a little further. I have not yet really started. My hon. Friend reminds me of the great plant in Scunthorpe. It has moved from an estimated profit of £28 million to a loss of £58 million. That is


going on all the time. A turn-round of about £80 million in the financial out-turn raises certain matters of interest.

Mr. John Ellis: I think that I should point out that the multi-million pound plant at Scunthorpe is running at nowhere near capacity. I say to my hon. Friend with compassion and understanding that Scunthorpe could produce another 1 million tonnes. That is part of the dilemma that the industry faces.

Mr. Cant: My hon. Friend is being very decent to me, because he has not given the complete Scunthorpe answer.
The Shelton works in my constituency, despite many difficulties, some of which are deliberately contrived, can this year make a profit of about £1 million. My hon. Friend the Member for Brigg and Scunthorpe appears to be engaged in a private discussion with another member of the Select Committee, my hon. Friend the Member for Bedwellty (Mr. Kinnock). It is a statistical coincidence that the £1 million profit that Shelton can make is equal to the £1 million loss that Scunthorpe will make on its canteen this year.
I want to come back to the point that Scunthorpe has run into a deficit of £58·1 million because it has capacity which is not being used. Of course, that might be called planning or something else.
Another facet of the problem is contained in a secret report. Everything is secret these days. It is suggested that a substantial uplift at Scunthorpe is unlikely unless the iron and steel making at Shelton is closed down. In other words, Scunthorpe could move into profit if the small profitable plant at Shelton were to close its operations so that Scunthorpe could take over the work being done successfully at Shelton. That is not on.
I have asked the Government and the Select Committee, which by implication recommended the closure of Shelton, about this search for size. Some years ago Sir Monty Finniston bought the Japanese blueprint for the maxi plant for £500,000. That has always been a gleam in the eye of the BSC—five maxi plants and nothing else. I suggest that there is a place in the scheme of things for electric are furnaces at Sheffield, Hunterston and Shelton.

Mr. Hardy: And at Rotherham.

Mr. Cant: And at Rotherham. I am trying to make friends.
I agree with my hon. Friend the Member for Central Ayrshire that we must get more integrity of management into the BSC. I do not propose to use affectionate terms about the chief executive officer of the BSC. Whether he is Black Bob or any other colour, he has communicated an approach to management in the BSC which has seeped down to the division in which the Shelton works is located. There is what is known in Shelton as a "dirty tricks department" somewhere in the BSC. The Minister of State wrote to me on 18th October saying that it was still Government policy that steel making at Shelton should not end and that there was a commitment to install an electric furnace.
But things have happened which, as a Socialist have saddened me. Not only has the Shelton steelworks been saddled with non-profit-making dumped export orders to the United States, but the order loading has been reduced from 5,000 tonnes to 1,000 tonnes a week without any explanation. Despite the Government's tripartite agreement about an electric are furnace for Shelton, in the annual operating plan all provisions for an electric are furnace was stripped out and all orders which had been placed were cancelled.
I do not propose to go into the distasteful attempt by the NUB—against the spirit of the tripartite agreement to which the Beswick review was subject—to withdraw the blast furnacemen's labour. I shall not mention the delay that has been engineered by the BSC on work measurement incentive schemes. But I shall mention the bitter and unjustifiable attack that was made on the quality of Shelton products. A telegram was sent to Scunthorpe saying that the losses to be incurred by Shelton this year would be £4 million. That was a lie. Shelton said that a mistake had been made by the computer. Yet that information was sent to headquarters.
I could go on about rumours that have been spread around concerning the new management arrangements in Scunthorpe. I do not want to be personal, but everyone at the Shelton plant, which has struggled since 1971 for survival, knows that BSC has taken steps to sack


the general manager, to appoint the manager of Irlam as the overall manager of Shelton and to make the general manager of Shelton the chief engineer of Shelton. All these motions were gone through to offer jobs at Scunthorpe to three senior Shelton men.
At a confidential meeting someone asked the boss at Scunthorpe "Is the general manager of Shelton to be replaced?" The answer was "In no circumstances whatsoever; that is sheer speculation which has no foundation." That man has since gone.
Let us stop being bemused by these giant plants. Let us get a few electric are furnaces to give the industry some flexibility.

Mr. Stan Crowther: I am sure that my hon. Friend will agree that there is a total potential production level for electric are furnaces brought about not by demand but by the availability of scrap and pelletised iron. I hope he agrees that there is no point in building electric are furnaces that cannot be fed.

Mr. Cant: It so happens that Shelton is in the best scrap-producing area in the West Midlands.
During the Beswick review, when we mentioned to a director of BSC, who has now sunk without trace, that we should have a pelletisation plan, at Shelton, long before Hunterston was thought of, he said "We never spend money on untried technology." Six months later orders had been placed for Hunterston.
Let us get more humanity into the management of BSC, so that the people who have struggled along without strikes producing good quality products will not in future be treated as they have been treated. If Shelton closes, there will be disapointment, and bitterness will seep into the folk memory of the Potteries people because of the way these workers have been treated by the BSC management.

8.24 p.m.

Sir Anthony Meyer: I agree with the hon. Member for Stoke-on-Trent, Central (Mr. Cant) on the importance of maintaining production in small profitable units.
I cannot support the motion tabled by my right hon. Friends because I cannot

agree with the report of the Select Committee. I do not necessarily reject its strictures, but the furore these strictures have aroused, which we saw exemplified in the grotesque speech made by the hon. Member for Coventry, North-West (Mr. Robinson), has unfortunately distracted attention from what should have been the important part of the report—the recommendations for future action. I do not fully agree with those recommendations, but it is the recommendations that we should have been debating. We should not be devoting our energies to charges and counter-charges about whether the Select Committee was misled.
The 10-year strategy of the BSC, supported by the previous Conservative Government and for which I voted in 1973, envisaged a modernised, efficient and large steel industry. It also envisaged the closure of out-of-date or wrongly sited steelmaking plants, of which Shotton was deemed to be one, wrongly as I thought. In the expansionary conditions of that time, I believe that general policy was the right policy, but I voted for it only after having had an assurance from Mr. Tom Boardman, the then Minister for Industry, that Shotton would have a sufficient reprieve either to establish a case for the continuance of steelmaking or to bring other employment into the area to absorb the redundancies resulting from the closedown of steelmaking.
Things look very different now. There is no expansionary climate, and the case for a large British steelmaking industry has been swept away, not only by the long standing recession and the drop in world demand for steel but also by the enormous growth of steelmaking capacity in the Third world and among low-cost producers, which is a factor which my right hon. Friend the Member for Sidcup (Mr. Heath) rather rode over. Whatever may happen to cyclical demands, I fear that it is the growth in the output of low-cost producers that will represent a growing threat to our ability to maintain a very large steel industry.
At the same time as we have this depression in the steel industry, the chances of finding new jobs for steelworkers made redundant are infinitely worse. We are in a new and much grimmer ball game. It is no longer defensible to cling to the 10-year strategy.
The British steel industry must be a slimmer and smaller industry than was envisaged back in 1973. It must be based on a much more modest expansion than was envisaged in the strategy of such plants as Port Talbot and Redcar which are ideally situated near deep water. It must also be based on the utilisation of small producers like Shotton, which have a proven track record of good industrial relations and making the best of the facilities they have. A modest investment in works such as these could yield a far better return for the steel industry than massive investment in new greenfield plants.

8.29 p.m.

Mr. Stan Crowther: One of the most unfortunate aspects of the whole of this sorry episode is the fact that the Select Committee reports are really dealing with two quite separate matters. On this point I am in agreement with the hon. Member for Flint, West (Sir A. Meyer). We are getting the two confused. One of them is detracting attention from the other. It has certainly done so in this debate. That is very unfortunate.
The constitutional niceties of relationships between nationalised industries and the House of Commons or between Government Departments and Select Committees may be very interesting to a lot of hon. Members, and I do not doubt that they are important, but that is a matter which should be discussed quite separately from the problems of the steel industry. I am afraid that we have got these matters very confused.
What Sir Charles Villiers may or may not have said to the Select Committee or the Department, and what the Department may or may not have said to the Committee, is not enormously exciting to the people who are living in my constituency. They are much less concerned, for example, with the question whether Sir Charles might have been clapped in the Tower—diverting though it would be—than they are with the question of what the Government, the BSC and the trade unions are doing to solve the deep-seated problems of the industry. Those problems were there long before the Select Committee started looking at them. The problems would have existed and would still have needed solving if there had never been a Select Committee.
I certainly congratulate my right hon. Friend the Secretary of State on not allowing himself to be panicked into snap decisions. It is most important to get the right answer. However, the time in which to get the answer is now running desperately short. I realise the difficulty of making any sensible long-term forecasts, but it seems clear that there are certain conditions which must be part of the final blueprint for the future of the industry. As some of my hon. Friends have said, one of them is that we must not contemplate massive reductions or any really severe reductions in total productive capacity.
I shall not pursue further the matter of electric are capacity because my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) allowed me to make my point during his speech.
I am absolutely sure that it would be a gross mistake to make any major cuts at all in the capital programme, because if we are going to have a successful industry it must, of course, be a modern industry. I am very pleased that that point is made in the Government amendment. I hope that the Government are taking the matter very seriously.
No doubt there will be some further reductions in manpower, but again, I think that we have to be very cautious on this matter. People who speak very glibly about gross overmanning in the industry have completely overlooked the enormous amount of demanning that has taken place in the last 10 to 15 years. The right hon. Member for Leeds, North-East (Sir K. Joseph) obviously has not the faintest idea of what has been happening in the industry since the early 1960s. It is obvious that he just has not examined it. It is unfortunate that he does not familiarise himself with these problems before coming to the House to talk about them.
In my area, the number of people employed in the industry is down by about 40 per cent. compared with the 1960 figure. I should imagine that that is fairly typical of quite a number of other constituencies.
I am afraid that I am about to say something that I have said previously in this connection. It would be a great deal easier to deal with the problem of obsolescence in the old established industries,


the problem of doing away with the old plant and reducing the number of people involved, if we had an effective regional development policy that brought in new jobs to replace those that are lost. People may say that there are not many jobs around and that there is not much industry on the move. This problem was being experienced in areas such as mine when there was supposedly full employment in Britain, and still we could not get any Government to take the matter seriously.
Individual redundancy payments go so far. If they are reasonable, they help to solve the personal financial problems of the people concerned. But they do not solve the problems of their sons and daughters who are leaving school and finding that there is no job to which to go because the works has closed down or has become modernised to the point at which it employs only half of the people that it used to employ. That is the real problem, and it is the real reason for so much resistance.
My hon. Friend the Member for Central Ayrshire (Mr. Lambie) was absolutely right when he talked about the danger of people selling out jobs. No job belongs to the individual. He inherited it himself, and it should be there to pass on to his successors. This is the real danger of people rushing into redundancy agreements.
On the news this morning I heard about the agreement at East Moors. I am not quite sure how reliable are the figures that we are given in the light of some information that I got this afternoon about the very strange arrangements that the BSC has made for giving information to the Press. That is a matter that will have to be pursued at some stage. Assuming those figures are right, they are not over-generous for people who are probably never going to work again.
Last month the Rotherham works, the Templeborough mill, finally closed, with about 90 redundancies. This was the last of five mills being closed down as part of the scheme which has brought into existence the Thrybergh bar mill which hon. Members will know is already famous for its record-breaking. In other words, the Templeborough bar mill is not being closed to cut losses but as part of a process of making more profits. That is the position in the Rotherham works.
I find it difficult to see any justification for the men at Templeborough being treated any less favourably than those at East Moors or elsewhere. I have no doubt the trade unions will have something to say on that in due course, but one thing that is absolutely clear to me is that, whatever form the long-term future of the industry is to take, the trade unions must be fully involved in the planning and policy-making at every stage and at every level. This has been a failure in the past. Unions must have a positive role in the planning and the development of the industry and in shaping the capital programme, and they must have a say in how money is to be spent. They must not be brought in merely to solve the BSC crisis.
There are few industries in which the employees have as deep a sense of personal involvement as in the steel industry. It may be difficult for hon. Gentlemen opposite to understand the pride that many steelworkers take in their industry. I suppose to take a pride in making steel may be a little incomprehensible to people who can take pride only in making money, but those who test the success of any enterprise solely on the strength of the profit it makes will have difficulty in understanding what workmanship pride really means. The most precious asset of the steel industry is the experience and skill of its work force and I mention as an example that within the last two weeks more remarkable achievements have taken place in Rotherham Works, this time involving the Templeborough cogging mill, a very old plant, and Aldwarke melting shop. I am happy to mention those in passing.
My final point is that any future policy for British Steel has to be aimed at making the fullest possible use of that skill, experience and expertise which rests among the labour force, and anything which is going to cut numbers to any major extent, losing this enormous wealth of skill, will be very damaging to the industry.

Several Hon. Members: Several Hon. Members rose—

Mr. Deputy Speaker (Sir Myer Galpern): Order. With five-minutes speeches before the winding up we should be able to allow four additional hon. Members to take part in the debate.

8.40 p.m.

Mr. Tim Renton: I am sure that everyone taking part in this debate on both sides of the House will agree that it is vitally important to get the British Steel Corporation into the right shape now and over the next few years for the next generation. This is important not only for employees in the industry but for all manufacturing consumers and fabricators who use its steel; and it is important, too, for the taxpayer who pays the bills. Bearing in mind the caveat that you have issued, Mr. Deputy Speaker, I shall not dwell on that aspect of the problem. My thoughts on the future will have to await the next debate on steel, whenever it happens, when the Secretary of State makes a statement or brings forward a Bill to increase borrowing powers.
This evening, trying to be brief, I wish to concentrate my remarks on two key retrospective issues, both dealt with in the reports of the Select Committee we are, I hope, to approve this evening.
First, could the Corporation have acted responsibly, but more quickly, in dealing with the developing crisis and, secondly, did Ministers, as the crisis was explained to them, match the urgency of the situation with appropriately intense effort to find a fair solution? Did the attention they gave to the matter match up to the needs of an extraordinarily complex and rapidly developing situation?
The first question is dealt with in the Committee's First and Second Reports. The situation in the BSC was confused by the change of chairman in September 1976. Sir Charles Villiers did not want openly to go back on the excessively optimistic forecasts of his predecessor, though it is plain that he became increasingly worried about the forecasts. In essence, the Corporation was caught with its trousers down as the industry went into a deep recession at the beginning of 1977.
The Corporation had a great deal of unfructified investment, which meant that it was building a great deal of expensive plant that was in the early stages or halfway through construction, and was not even contributing to revenue, let alone profit. It had a lot of obsolete expensive plant and rising indebtedness. As a result of this combination of factors, together

with increasing interest payments because of the rising indebtedness, it was faced with the prospect, as the Committee was told, of having to operate at 92 per cent. capacity just to break even. No steelworks in the world normally operates at 92 per cent. of capacity.
The Committee could see from these facts that the Corporation was heading towards a situation in which, in normal commercial terms, unless there was a sharp and rapid upturn in the market it would go bust.
The situation was complicated by the additional problem of a large degree of overmanning in the Corporation and this was largely perpetuated by the election promises of Labour Members some of whom are now Ministers. The degree of this commitment is spelled out by the Secretary of State for Industry in answer to Question No. 289 in the Fifth Report. I shall not go over all the comments that he made but it is clear that the Corporation was no longer in control of the situation. Even if it had wished to do so, it could not have laid off workers, because of the election commitments made by Labour Members.
A further problem was the obstructionist and even bloody-minded attitude of some shop stewards, some small groups of workers and even some union leaders. We went over this briefly in our debate on 22nd July.
In the past two years, we have seen Port Talbot held up by five electricians, the Llanwern blast furnace not blown in because of the actions of a handful of blast furnace men and the Redcar sinter plant not commissioned because of a handful of boilermakers. Sadly, a small group of men in each case would not give up their traditional practice and insisted on going on with their old crafts. They held up many hundreds of millions of pounds of investment for a number of months.
This could not have happened except in a nationalised industry. I do not believe that it would have been possible for unions in the private sector to take the same attitude as that taken by some small groups in the steel industry.
On top of all this, we saw only a month or two ago, at the time the Corporation was telling us that it was losing £10 million a week, the largest union in the


Corporation demanding a full 10 per cent. wage increase. It was not content with the 6½ per cent. offered by the management. To many people, that was an incomprehensible attitude. The Corporation could not afford to pay any wage increase, but the biggest union went down the line demanding a full 10 per cent.
I turn to the second issue—the role of Ministers. This is a key issue for the House. I am glad that the Minister of State is in the Chamber. I believe that the role of the sponsoring Minister in the nationalised industries is supremely difficult. I remember the Secretary of State giving evidence to us. In a telling phrase he said that it was difficult to get a razor blade between some of his engagements. Ministers are torn between the wish to let the nationalised industries get on with the job and the need to exercise a general supervision, especially of financial requirements.
This duty is notably more extensive in the case of a nationalised industry which is running with the largest corporate loss ever known in the United Kingdom. It is necessary to put into context the problem of the borrowing powers of the Corporation today. By the end of this year the BSC will have borrowed about £4 billion. On present form, in each of the next two years it will borrow about £1 billion, so that by the end of 1980 it will have borrowed £6 billion. That amounts to £125 for every man, women and child in the country. For the average family unit of four it amounts to paying £500 to the Corporation by the end of 1980. That sum would go a fair way towards allowing the first-time buyer to pay the deposit on a house.
We often think that the National Coal Board has the greatest requirement for borrowed money. It employs 242,076 people—40,000 more than the BSC—and currently borrows only £1 billion a year. That is only a quarter of the BSC requirement.
Throughout this year the impression that many of us have received from Ministers is that they hoped that this problem of the BSC would just go away; it would be forgotten in the recess, and that our report would get buried. They hoped that there would be a market upturn.
I accept that for Ministers this has been a very embarrassing situation, primarily because of the commitment to maintain jobs in Labour constituencies. We must remember that this maintenance of employment—because of the operation of the cash limit—has meant a cut-back in capital investment.
For the past four years the Government have been maintaining jobs at the expense of future jobs within the steel industry. There is no hope of maintaining our market share in the steel industry without the most modern capital equipment. Capital investment has now been cut in order to stay within the cash limit and preserve jobs.
Ministers constantly hoped that this problem would disappear without comment. This is epitomised in one telling quotation, when the chairman of the BSC appeared before our Committee on 30th January and answered a question from the hon. Member for Bedwellty (Mr. Kinnock) about a meeting that he had had with the Secretary of State on 18th July 1977. The hon. Member said:
After you had said that in response to the Secretary of State's question as to whether it would be £250 million or £350 million, what did the Secretary of State say then?
The Minister of State was present. Doubtless he will be able to recall whether this answer was correct, because Sir Charles said
I do not recall him
—that is, the Secretary of State—
saying anything. I think he accepted that. On my diary I have no record of him replying.
The right hon. Gentleman said nothing. He hoped the problem would go away.
The duty of care is I believe the nest definition that exists of the duty of directors of companies in the private sector. But it is this duty of care, in this case on behalf of the management of the BSC and all those employees in the Corporation who do not work in Beswick plants, and on behalf of taxpayers, that has been conspicuously lacking among Ministers in the Department of Industry.
Finally, I turn to the narrow point concerning the events of the week of 17th–27th July last year. The week started with Sir Charles being told by his managing director (finance) and chief executive that the Corporation's loss was


likely to be £440 million rather than £350 million. It ended with the Minister of State saying that the upturn that was taking place would assist the Corporation.
A meeting was held on 18th July between Sir Charles Villiers, the Secretary of State and the Minister of State. The operating plan showing a loss of £350 million had been known to the Department of Industry since 26th April. Three months had passed in which, in the words of Coopers and Lybrand, the market situation was "deteriorating rapidly". Yet the Ministers apparently accepted without any question that the loss was still only £350 million, or it might be £100 million less, even though the market had been going down all those months. Surely it was more likely that the loss would be greater, that it was much more likely to be £400 million than £250 million.
I can come to only two conclusions. Either Ministers did not probe sufficiently and did not ask enough questions in advance of the debate on increased borrowing powers which was to take place four days later. In that case they can be accused of negligence. Alternatively, they did probe more and were told more but they concealed the facts from the House. In that case they misled the House.
Naturally, the House will form its own conclusions. Since I am a generous person, I prefer the first conclusion, but I shall listen very carefully to the Minister of State tonight when he gives the House an account of the way in which he has discharged his duties and responsibilities.

Mr. Deputy Speaker: My contribution is to say that I do not know why we have clocks in the House.

8.49 p.m.

Mr. John Ellis: Most hon. Members were trying to keep to five-minute speeches, and I hope that Conservative Members will note that by the inordinate length of his speech the hon. Member for Mid-Sussex (Mr. Renton) has deprived one of them of the chance to speak.
In considering all the things that have been revealed by the report the House should bear in mind that with a nationalised industry the only way in which it, and therefore the people outside, can

probe is by reason and by virtue of the Select Committee. That is one of the reasons why I think that we should be complimentary to the Select Committee and the Sub-Committee for giving us the opportunity to look below the veil and for the job that they did. I have always held it important that it be open to the House either to agree or disagree with the conclusions, but the most important fact was that it was able to probe and get evidence for the House.

Mr. Mike Thomas: Before my hon. Friend leaves that point, does he agree with me that Select Committee members have very clear responsibilities to their parties and to their Front Benches, to the steel industry and to steelworkers, but they also have clear responsibilities to the House and to the truth, and that we have pursued both of those objectives?

Mr. Ellis: I would agree with that. One of the things that I should like to say about the Committee, in view of some of the criticisms made of it, rightly or wrongly, is that we should not have had the reports or this debate were it not for the Select Committee. We should not have had page 73 of the Fifth Report, which some of my hon. Friends should have read. It reveals:
Secondly, we will have to face up to a retrenchment of capacity beyond Beswick.
That was going on inside the BSC secretly. My hon. Friend the Minister and my right hon. Friend the Secretary of State subsequently gave evidence that that was never revealed to them.
Therefore, one of the matters that we have to look at immediately is the relationship between this nationalised industry and the Minister down to the House of Commons. We are the people who report to the nation so that the world at large knows what is going on. It is revealed very graphically that we should not have had those matters revealed had it not been for the Select Committee.
We on the Labour side believe in nationalisation. The Government must look radically at the whole relationship of the trade union movement with the industry. They must look at who is saying what. In the past we have tended to put in management which has been left to operate entirely on its own, it


seems, with very little regard to accountability to anyone.
Scunthorpe is a town entirely dependent on the steel industry. There has been massive investment of millions of pounds. The Select Committee said that in view of this investment and the fact that we can produce much more steel there should be a modest investment in order to capitalise on the potentiality of that huge Anchor steel project.
I listened to my hon. Friends' speeches about the particular difficulties at the older plant. I understand the position. In Scunthorpe the cards have fallen in such a way that we have that multimillion pound investment. We ought to have a little more blast furnace capacity. In order to do what? It was expected that we should need 36 million tonnes by the mid-1980s. The analysis has been done elsewhere. The figure is now half that.
It may be that the massive investment at Scunthorpe in such a big programme as Anchor would never have been made if it had been known at the time. I understand the difficulties of my hon. Friend the Member for Stoke on Trent, Central (Mr. Cant). He was a little unfair when he spoke of what we had lost at Scunthorpe. We have all lost.
My workers also depend on steel, and we have only been running at a slight capacity compared with the capacity at which we could operate. We ought to have a further modest investment so that we can utilise those millions of pounds worth of capacity that exist.
Having said that, I know that there are steelworkers in other parts of the country at older plants who probably work harder than my boys because we have the modern machinery. That is a problem that we face. If Scunthorpe is to utilise that capacity, as I believe it must, because it is a low-cost plant, that is another million tons of steel that we can get out.
What should we do with it? We could sit back and say "We shall work all the hours God sends and produce it better than anywhere else." But the steelworkers to whom I have spoken do not say that. They recognise that there is a problem. They acknowledge that the trade union movement will have to discuss all these matters.
We must see that we do not import steel when we can produce it. We must make use of the people available, though not through the worker-director system, to change the Corporation so that we all work as a team. When my hon. Friends and I talk about the industry we must see how we can make advances, but on the basis of trust and a change of organisation and approach by this huge nationalised industry. At the end of the day we must have a viable and efficient steelmaking industry.

Several Hon. Members: Several Hon. Members rose—

Mr. Deputy Speaker: I call the hon. Member for Kingston upon Thames (Mr. Lamont).

Mr. Mike Thomas: On a point of order, Mr. Deputy Speaker. It may have escaped your notice that whereas both Conservative Members of Sub-Committee B of the Select Committee on Nationalised Industries have been called to speak none of the three Labour Members has been called. Will you draw that to the attention of Mr. Speaker when you report to him on your conduct of the Chair and point out that those hon. Members involved felt that this was not a satisfactory use of Mr. Speaker's powers of selection?

Mr. Deputy Speaker: I believe in a direct approach to Mr. Speaker himself, who will soon be in the Chair.

9.1 p.m.

Mr. Norman Lamont: The first question I must answer is that put by some Labour Members, whether we were right to hold this debate on the Select Committee reports at all. I immediately concede that it would have been much better if the Government themselves had provided the time for the debate, if they had agreed to the Select Committee's recommendation that there should be a two-day debate before any decisions were taken and before any statement was made.
It was clear from what I heard Ministers say that whereas they were prepared for Parliament to be a spectator, they were not prepared for it to participate and to influence the decisions. I find Ministers' accusations and attitudes extraordinary. Serious charges have been made against them, and one would have thought that they would welcome


the earliest possible opportunity to rebut those charges, as they say they can.

Mr. Mike Thomas: Mr. Mike Thomas
rose—

Mr. Lamont: I should like to get on.
The second reason why I think we were right to hold the debate is that if one wants the Select Committee system to develop, as I do, one sees that it can do so only if the work of the Select Committees is related to the Chamber, where the main action is, where decisions are debated. The great threat to Select Committees is that they will become simply academic studies, making interesting bedtime reading but having no real influence on the guts of politics and the decision; of Government.
No one can dispute that the three reports have had a remarkable Press reception, if for only one reason. The hon. Member for Feltham and Heston (Mr. Kerr) is riot present now. I do not suppose that he is used to the experience of finding himself Man of the Week in the Financial Times. Perhaps on a future occasion he will find himself Executive of the Year in the Wall Street Journal.
But the Press perhaps got the emphasis wrong, because I believe that the First Report is just as important as the Second and Fifth Reports. The Secretary of State was perhaps reading from his prepared script, because it was unfair to say of my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) that he hardly dwelt on the First Report but concentrated on the Second and Fifth Reports. That was precisely the opposite of what my right hon. Friend said. He addressed himself to the main issues in the First Report, which I regard as being the central issues—the questions of employment and the finances of the industry.
I have been amazed to read in the Press the comments ascribed to Ministers that this report is the work of amateurs, a bunch of hopelessly misinformed people. I do not believe that anyone who reads the First Report, with its analysis of the scrap situation or the finances of the Steel Corporation, can conclude that it is anything other than essential reading for any politician who wants to become involved in the affairs of the British Steel Corporation.
Of course, we can all pull out nuggets of information to satisfy our own particular prejudices, even from the minutes of evidence. I read with some interest the view of Sir Charles Villiers in his evidence that Alpha Steel in the private sector was actually able to get a better manning agreement precisely because it was in the private sector and not in the politicised sector.
But the main issue—one on which my hon. Friend the Member for Arundel (Mr. Marshall) concentrated—which arises out of the First Report is the relationship between Whitehall and the nationalised industries. We find that this report confirms many of the views that we have long held. We have long held that the nationalised industries and the Steel Corporation ought to be free from day-to-day intervention. It ought to be set targets as a Corporation, which it does not have at present. The Secretary of State has the ultimate sanction. He can change the board and the chairman of the Corporation.
We find the tenor of that aspect of the report very acceptable. I would strongly commend to the House the recommendation in the report that the whole apparatus of the reporting system—anyone who has gone into this knows that it is an extraordinary bureaucratic labyrinth—should be re-examined with a view to seeing what parts could actually be cut out.
The Committee has also much to say about the way that the system of cash limits operates. It puts forward the suggestion for consideration that there ought to be a separate cash limit both for revenue and investment. It is worried that the Corporation might become like British Leyland—a company plundering the money for investment in order to pay the wages bill. I think the Committee demonstrates quite clearly that the cash limits discipline is not biting on the Corporation in the way in which it was intended. By running down stocks and other things the Corporation is able to push the problem back from one year into the next.
What we particularly applaud is the realism in the report. It faces up to the basic problem of the industry. The grim facts of the British Steel Corporation crisis are spelt out. There is no flinching the


industrial relations situation in the Corporation, and the Committee makes quite clear that this situation is worse than in manufacturing industry as a whole. It does not refrain from pointing out that the Corporation has very little hope of financing its own investment and that for that reason the Corporation will be a drain on public funds for years to come.
The report emphasises, as did my hon. Friend the Member for Mid-Sussex (Mr. Renton), the extraordinarily high break-even point of the Corporation. It has to operate at over 90 per cent. of its 25 million to 26 million tonne capacity. Last year it produced only 17 million tonnes. I do not think anyone reading that First Report can conclude anything other than that the finances of the Steel Corporation, which are over 10 per cent. of the public sector borrowing requirement, will other than remain a threat to the Government's IMF-imposed economic policy for some time to come.
It is not only the negative aspects of the report that we endorse. It also has recommendations for the future. It suggests how the board ought to be strengthened. It seems to me absurd for a Corporation of this size to have a board with only four executive members. Grosvenor Gardens is the biggest office that I have ever seen for four people.
The report also says that the investment programme needs urgent reappraisal. While one does not need to accept every single word of the recommendations, the general thrust of the message must be right—that it is better to concentrate on modernising the existing successful parts of the Corporation than on developing massive green field sites and new plate mills.
There is no doubt that the original plan for the BSC—the 10-year plan—has been overtaken by events. Who on earth would buy all the steel that the plants would be producing? We cannot export it because more and more countries of the Third world are producting their own steel. All the assumptions of the 10-year plan go beyond the demand for steel that could have come from domestic engineering or construction industries. The central problem of the steel industry is how does one reconcile the output of more and more steel from overmanned

plants when there is an acute shortage of demand both at home and abroad?
I turn to the controversial question of manning and keeping open uneconomic plants. The views of the Conservative Party have been confirmed. We have always said that the Corporation is overmanned and that this matter should be treated urgently. Whenever my right hon. Friend the Member for Leeds, North-East has mentioned this matter and put forward his views fearlessly, as he does, he has had abuse heaped upon him. Yet the Select Committee comes down firmly on his side.
The Committee says that productivity needs to be increased urgently within the Corporation and that, furthermore, it needs to be increased not by new investment adding surplus capacity but by cutting down to internationally competitive levels of manning.

Mr. Mike Thomas: I do not allow my hon. Friends to misrepresent the Select Committee, so I cannot allow the hon. Member for Kingston upon Thames (Mr. Lamont) to do so either. The Select Committee made it clear that the Corporation could not survive unless certain pieces of investment took place. It recommended investment that is not in the current development programme.

Mr. Lamont: I accept that, and I am coming to the point about new investment. At present, however, I am emphasising that the Corporation needs internationally competitive manning levels. The key point that has emerged from the report and the one that we want to put across is that the longer action is delayed, the more jobs will be lost eventually. The Committee warned that as delay has continued and we have failed to grasp the nettle, so costs to the Corporation have increased. Costs of redundancy payments, for example, increase with every delay.
In the last report, the Committee says firmly that unless the nettle is grasped, there is a danger that the disease will appear later in a more virulent form. That is the message that we want to get across over and over again—jobs cannot be preserved by making them uncompetitive. The only jobs saved by overmanning in British Steel are jobs in Nippon Steel, United States Steel, and


Thyssen Steel. Only by reducing overmanning do we have a chance of recapturing our share of the market. Only in that way can we justify more investment. Only then will more jobs be created in the Steel Corporation and in the metallurgical industries which supply it.
Over and over again the Government have adopted tie same ostrich-like attitude. Mention has been made in this debate of the Beswick plants. Here I come to the points raised by my right hon. Friend the Member for Sidcup (Mr. Heath). New investment and the closure of plants are related. One cannot be justified without the other. Without closures new investment cannot be justified.
By setting up the Beswick review and delaying closures, the Government have put at risk the whole future of the BSC. Old plants have lost more and more money, and the cost of investment in new capital has gone up to skyscrapingly high levels. In the meantime, our competitors have forged ahead while we have been treading water. So much money and time have been lost that it has become more and more difficult to proceed with investment. This proves that when industrial decisions become political they are invariably disastrous. The tragedy is that a policy designed to save jobs leads directly to increased unemployment.
The only way to save jobs in steel is to have not a job-embalming industry, but a wealth-creating industry. It is not so much a question of the Government deceiving Parliament. They are deceiving the people working in the steel industry by giving them a false sense of security by encouraging them to believe that there is a future on a scale that cannot be implemented.
I believe that the Secretary of State knows and that he has sound views. We know what he thought about Drax B and Chrysler and we admired him for his views. The trouble is that we are not sure that we are backing a winner. The right hon. Gentleman always plays the game, but he always loses.
The reason that we wished to have this debate was that we felt that the Committee made a detailed and careful study of the facts and the economic facts of life in

the Corporation. We have been pointing out those facts of economic life for a long time. I hope that these will not be regarded as the views merely of the Conservative Party but will become part of the common ground, and that there will be a little less stridency, mud-slinging and blood-curdling prophecies of unemployment from the Minister of State.

Mr. Mike Thomas: If that is the hon. Gentleman's genuine ambition, why did not he and his right hon. Friends table the bi-partisan motion that was agreed by all the Select Committee Members? Why did the Opposition chose to table a party-political motion?

Mr. Lamont: For the simple reason that we believe that the Select Committee had the courage to face difficult facts and to advocate difficult decisions. We respect the members of the Select Committee, but we would respect them even more if they displayed in this Chamber the same courage as they showed in Committee.

Mr. Mike Thomas: The hon. Gentleman is making a direct imputation. I ask him to remember that no member of Sub-Committee B was called to speak in this debate. We all had our speeches ready.

Mr. Lamont: I had no wish to make personal imputations against the hon. Gentleman.
Let me turn to the matters raised in the Second, Third and Fifth Reports of the Committee. Those reports raise important constitutional questions about the relationship between the nationalised industries, Ministers, Select Committees and the House of Commons as a whole.
I turn first to the question whether the Select Committee had information withheld from it and whether it was entitled to it. I sympathise with the view expressed by Ministers and by Sir Charles Villiers. We do not want to create another layer of bureaucracy. We do not want to add to the reporting system.
I accept at once that it would not be a good idea if year after year on every occasion a Select Committee were able to demand all the correspondence passing between a chairman and the Secretary of State. But against that let me say that this was the first investigation by a Select Committee into the BSC for some years. The Select Committee has a good record


and was not betraying confidences. In the past it has not gone on unnecessary fishing expeditions. Above all, when an industry has as consistently bad a record as the Steel Corporation and when it faces an unprecedented crisis, it is hardly surprising that the questions asked by a Committee will be inconvenient and embarrassing to Ministers and officials.
I do not wish to dwell on that point. All I would say is that perhaps it would have been wiser had Sir Charles Villiers not expressed the view, as he did at the beginning of the investigation on 6th December 1976, that the Committee would get all the information that it wanted. Plainly, the Committee does not believe that it got all the information that it wanted.
On the question of forecasts, again I recognise that it is all too easy to be right, with hindsight. I share the view both of Sir Charles Villiers and of Ministers that forecasts ought to be treated with considerable scepticism. Therefore, I am prepared to accept some of the explanations that have been put forward about the operating plan which showed up a £466 million loss in July not being acted upon and not being publicly revealed.
I can understand that, but I find it extremely difficult to understand how, when the operating plan of the Corporation as long ago as April had predicted a loss of £350 million, Ministers could have said what they said and Sir Charles Villiers could have used the words that he used in July.
I have read Sir Charles Villiers' words over and over again. To me, they clearly implied that the losses of the BSC would be between £95 million and £255 million. That was unwise. I notice again in the evidence that Sir Charles gave to the Select Committee in January that he, too, accepted that perhaps that was not the wisest form of words to use.
But, given that this forecast of a loss of £350 million had been around since April and had been passed on to Ministers soon thereafter, I cannot for the life of me begin to understand how in July Ministers thought that the loss was going to be less than £250 million. I cannot see what reason they had for thinking that, except the most Micawberish reason that something was going to turn up.
One reason that has been put forward has been that the annual operating plat was based on the assumption of there being no policy changes—a worst assumptions forecast—and that the Corporation did not believe it because it always thought that it could do something to prevent it from happening.
That was the defence made by Sir Charles in his evidence to the Committee in January this year. But he made it clear that, when talking about action to prevent the £350 million loss becoming a reality, he was talking about the closure of plants and demanning, not just about the Beswick plants. His evidence makes it clear that he was thinking of action which would go well beyond the closure of Beswick plants. In other words, he did not believe his forecast of £350 million, because he assumed that Ministers would allow him to do precisely what they said all along they would not have accepted at any price. At the same time, Ministers were accepting his soothing view of the world, even though they could not contemplate the one assumption that would have made it possible. They were willing the end without the action. Contact between the Secretary of State and Sir Charles Villiers in July seems to have been nothing more than a dialogue of the deaf.
I turn now to the debate on 22nd July and what information should have been provided to Parliament. The whole thrust of the Iron and Steel (Amendment) Act 1976 was that, whenever these borrowing orders came before the House, as much information as possible should be provided. Formal amendments to that effect were put down, but the Minister dissuaded hon. Members from voting on them. He said that it was not necessary, because he was "a compulsive provider of information." What has happened to this compulsive provider of information? When the BSC came along to increase its borrowing powers from £3,000 million to £4,000 million a year ahead of schedule for the second year in succession, the Minister of State gave us less information than a provincial bank manager would require for a newsagent's overdraft.
On that occasion the Minister of State accused the Opposition of scaremongering. He accused us of seeking headlines. He criticised us for using phrases such as "the Corporation is drifting to disaster".


It was in that debate that he used the phrase
the upturn that is taking place will assist the corporation."—[Official Report, 22nd July 1977; Vol. 935, c. 2136.]
He used that phrase despite the fact that Sir Charles had told him a few days previously that he could see no sign of an upturn taking place.
I am sure that the Minister has been burning candles at both ends trying to find a reason for saying that. However, whatever the reason—I accept that the Minister may have had a reason—surely he at least owed it to the House to have admitted that his view of the future was very different from that of the chairman of the Corporation.
The kindest explanation that may be put forward of the Minister of State's behaviour—it is the one that I endorse—is that he is a compulsive provider not of information but of the first thing that comes into his head when asked a question. It was in reply to my hon. Friend the Member for Mid-Sussex that the hon. Gentleman used the phrase. The hon. Gentleman had no justification for using that phrase. It was nothing but vapid nonsense.
It is not deception but complacency and lack of urgency on which the Government stand indicted. The Select Committee indicates over and over again that that is so. It indicates the belief that mastery inactivity would somehow suspend the laws of the market place. It indicates a desire to shuffle the blame on to international factors, just as the Government have tried to do with almost every problem with which they have been confronted, whether it has been unemployment, crime or anything else.
We all remember that shortly before the debate last July the Minister of State was telexing round the world to different embassies to get figures that could show that some companies were losing rather less money than the British Steel Corporation. However, it is one thing to give highly selective statistics to the House, and quite another thing for those selective statistics to be reproduced in the Corporation's house magazine that is issued to those who work in the Corporation. What hope have we that those people understand the gravity of the crisis if Ministers' replies on a selective basis are

passed down even to those who work in the industry?
The tragedy of the situation is that the longer action has been delayed the more difficult it has become. If it was politically impossible, as the Minister says it was, to deal with a prospective deficit of £350 million in July, how is it any easier to deal with a deficit of £520 million today? That is the tragedy of the situation.
The Minister loves to chill a great deal of blood. He likes to tell us how my right hon. Friend the Member for Leeds, North-East will create an industrial desert. However, we know now that the Minister of State is planning his own private little Sahara. We all know about the Kaufman Plan being revealed in the Daily Mirror. The Minister of State was talking about cut-backs. They were not confined to the Beswick plants. They were cut-backs that went well beyond that. They applied to every area except specialist steels, which, as we all know, represent only a very small part of the Corporation's activities. It is the Kaufman report that illustrates the truth of what we say—that the longer action has been delayed, the graver the crisis has become, and the more painful the decision will be to take.
We say that the main issues in this debate are the rights of Parliament to be informed and the rights of Parliament to assert the interests of the taxpayer. I do not believe that Ministers have acted in the interests of Parliament, or of the taxpayer. Above all, I do not believe that they have acted in the interests of those who work in the industry. They had a cruel deception practised on them, and their problem will be even more grave as a result of the delay and inaction that has taken place. It is because I believe that that is the clear implication of the reports that I urge all my right hon. and hon. Friends to vote for the Opposition motion.

Mr. Mike Thomas: On a point of order, Mr. Speaker. I apologise to my hon. Friend the Minister of State. I raise the point of order at the suggestion of your Deputy and particularly in the light of the remarks made by the hon. Member for Kingston upon Thames (Mr. Lamont). Is it not uniquely unfortunate that, although both the Conservative


Members of Sub-Committee B of the Select Committee on Nationalised Industries were called to speak in the debate, none of the three Labour Members of that Sub-Committee was called?

Mr. Speaker: The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) is quite right. It is unfortunate. I have been studying the list and I see that there were long speeches at the beginning of the debate which altered my expectations of who would get in. I am very sorry that none of the hon. Members concerned was called.

Mr. Kinnock: Further to that point of order, Mr. Speaker. I also apologise to my hon. Friend the Minister of State. I wonder whether you could encourage a certain flexibility in the Chair so that as the clock gets towards 9 o'clock hon. Members who have a particular interest in debates such as this could be called even for a short time?

Mr. Speaker: The hon. Member for Bedwellty (Mr. Kinnock) is quite right. I have learned an important lesson from what has happened, and I am very sorry that the hon. Members concerned had no opportunity to express their points of view.

9.31 p.m.

The Minister of State, Department of Industry (Mr. Gerald Kaufman): For the most part this has been a constructive debate. My hon. Friends were determined to look to the future. So was the right hon. Member for Sidcup (Mr. Heath) who, in a wide-ranging speech, totally punctured the partisan case which had been advanced by his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph). When the hon. Member for Kingston upon Thames (Mr. Lamont) accused the Government of a desire to shovel off the blame on to international factors, he totally failed to understand the world conspectus in which the right hon. Member for Sidcup had set the whole of the steel crisis.
While the debate looks to the future, it is inevitable that we should examine the events of the past. A significant event in that past was the debate on the Iron and Steel Borrowing Powers Order on 22nd July 1977. The Fifth Report of the Select Committee examines that

debate, and my part in it, to see whether the House was given a realistic picture of the crisis then facing the British Steel Corporation. Was I in that debate fostering over-optimism by the statement that I made? The report quotes that statement:
As the Chairman in his public statement this week has not sought to put a gloss on the current very serious situation, I do not think that he is indulging in over-optimism.
In that statement, to which I referred, Sir Charles had certainly not put hon. Members in an over-optimistic frame of mind. It was a very gloomy debate. Indeed, the hon. Member for Arundel (Mr. Marshall), a member of the Select Committee, in his speech in that debate said:
I pay tribute to the way in which Sir Charles Villiers, in his Press statement this week, put forward very plainly many of the grave problems that the Corporation faces.
That was a fair statement by the hon. Gentleman, who always speaks fairly.

Mr. Michael Marshall: The Minister of State must understand that when I made those comments I was not aware of what is now seen to be an understatement by Sir Charles Villiers in terms of operating results.

Mr. Kaufman: I shall deal with that point.
In my speeches—I made two, moving the order and winding up—I too tried to draw the attention of the House to the grave problems to which the hon. Gentleman referred. I said, in column 2135:
steel remains in the grip of the longest and most severe depression that any of those currently engaged in the industry have had to face ".
In column 2136, I said:
the recession has been much more severe and long-lasting than was expected.
In column 2167, I said:
the world steel industry is facing almost unprecedented problems.
Further down the same column, I referred to:
the real, serious and profound problems of the BSC, which I should not seek to underestimate.
In column 2174, I said:
I have not sought in any way to pretend that the problems of the Corporation are not very great."—[Official Report, 22nd July 1977; Vol. 935, c. 2135–74.]
No false optimism there, Mr. Speaker.
But a reader of the Select Committee report may wonder why I did not quantify those problems by putting before the House a forecast figure for the BSC's likely loss. The Fifth Report, in paragraph 11, says of me:
he was speaking to a House which, on the basis of the Press Statement of 19th July, was expecting a loss of between £95 million and £255 million, in the private knowledge that, on unchanged policies, the loss would be of the order of £250 million to £350 million.
But I did not have precise private knowledge of that kind. It had been a developing situation, as the months went by.
Earlier in the year, the Corporation had predicted a loss of about £250 million. This was indicated in the cash figures presented to Parliament in March in the financial statement and budget report. On 26th April my Department was warned that the loss might be between £300 million and £350 million. The quarterly report of the Corporation sent to us in mid-May had a figure of £350 million.
Paragraph 8 of the Select Committee report records that on 18th July, four days before the debate, at a meeting with my right hon. Friend and myself, Sir Charles Villiers said that
the situation was not as bad as had been painted, the Corporation were unlikely to lose as much as £250 million to £350 million in the current financial year.
All these figures that I have given to the House included a contingency allowance then amounting to £85 million or more, specifically for events that could not be predicted. That was my private knowledge, and that was why I told the Select Committee in my evidence on 6th February that:
It might have been misleading the House to give them a specific figure.
So, far from having any intention of misleading the House, I sought to avoid misleading the House. That is what I assured the Select Committee.
Paragraph 11 of the report also corn-pares words of mine, spoken in the House in the borrowing powers debate, with evidence given by Sir Charles Villiers to the Select Committee on 30th January. The report states that
There is also a very marked contrast between his"—
that is, my—

optimistic statement in the debate that 'the upturn that is taking place will assist the Corporation' and the more pessimistic statement made to him in private by the Chairman of the Corporation four days previously that 'I am bound to say I do not yet see a significant upturn in demand or price '.
I was glad that in his speech today the hon. Member for Arundel deprecated selective quotation, because the House should know that those 10 words from my speech quoted in the report do not represent the sense of what I said. They are not even a complete sentence. My remark came in an exchange with the hon. Member for Mid-Sussex (Mr. Renton), who intervened in my speech with this question:
Has the BSC any finite reasons for expecting demand to improve in 1978, in the period that the hon. Gentleman has just mentioned, or is it rather that it cannot see any improvement during the current year, which I understand, and is therefore optimistically hoping for an improvement next year?
I replied:
Clearly there is no utterly definable reason that one can provide for such an expectation. The hope is that the upturn that is taking place will assist the Corporation.
The report quotes only those last 10 words as though they were my complete statement. In any case, a reading of my full speech shows that Sir Charles and I were talking about two different kinds of upturn. Sir Charles was talking about an upturn in demand and price for steel and said that he did not yet see a significant upturn. I had dealt with that aspect earlier in my speech, when I stated:
However, the signs of an upturn in world steel markets, which appeared briefly in the early part of last year, were not sustained."—[Official Report, 22nd July 1977; Vol. 935, c. 2135–6.]
In this part of my speech a little later I was referring to a more general economic upturn. This can be seen by my reference, a couple of sentences later, to the recession. The House will recall that around that time there was a widespread expectation that an upturn in the United States would help to pull our economy out of the recession and the expectation was that steel industries would benefit from that upturn.
This was certainly a view that was widespread in the Press at the time. For example, on 4th July 1977 the International Herald Tribune report from


Pittsburgh, the steel centre of the United States steel industry, under the headline "Steel officials confident of strong second half", this statement by Robert Lauterback, chairman of the Wheeling Pittsburgh Steel Company:
I am sure the second part of the year will be better by 5 to 7 per cent. I am very heartened by the continuing strong trend of our orders.

Mr. Tim Renton: Mr. Tim Renton
rose—

Mr. Kaufmann: I shall give way to the hon. Gentleman but I wish to finish this passage in my speech. Mr. M. J. Curto, vice-president of the United States Steel Corporation, the biggest steel company in the United States, said that the company was
sticking 100 per cent, to its prediction that this year would turn out to be significantly better than last.
That was the view of two leading United States steelmen. They were both wrong. We were all wrong. When the Chairman of the Select Committee, my hon. Friend the Member for Feltham and Heston (Mr. Kerr), questioned my hon. Friend the Secretary of State in the Select Committee on 1st December he asked—and I quote his words:
Would not the Secretary of State agree with me that a large part of the difficulties in terms of the forecast that went rather badly wrong was owing to the major hiccup which occurred in the American economic recovery in July and August last year? Did that not lead to the miscalculation?
That was what my hon. Friend asked, and he was absolutely right. It was indeed a miscalculation, but to miscalculate is not to mislead.

Mr. Renton: Mr. Renton
rose—

Mr. Kaufman: I shall give way to the hon. Gentleman in a moment. I have been preparing for him. If there was one hon. Member who in any case should not have been misled it was the hon. Member for Mid-Sussex, because, later in the debate on 22nd July, he commented on my remark and said:
I asked the Minister of State about the upturn in sales next year upon which the Corporation has attached so much hope. He naturally said that the BSC could only hope but that it could not be certain. That was an honest answer. So much of the Corporation's chances of getting back into profitability depends upon the upturn in the market."—[Official Report, 22nd July 1977; [Vol. 935, c. 2161.]

Mr. Renton: I am amazed that the Minister should quote that comment of mine, because when I said it was an honest answer I did not know that he had the BSC operating plan showing a loss of £350 million, and I did not know that a meeting had taken place between him and the chairman on Monday 4th December.
My question to him is different. He refers to the optimism in the United States in July as justifying his reference to an upturn. How was it that in that same quarter, as he has so often reminded us—that is, the third quarter last year—Bethlehem Steel reported a loss of 750 million dollars, and laid off about 10 per cent, of its work force?

Mr. Kaufman: For the same reason that was given by my hon. Friend the Member for Feltham and Heston (Mr. Kerr). The recovery which had been expected faltered. As for the reply of the hon. Member for Mid-Sussex to me, he explains now what he meant then. It is interesting that if one is questioned in March 1978 about a speech made in July 1977, one has to explain oneself.
The hon. Member for Mid-Sussex said that he did not know on 22nd July what the chairman of the Corporation had said to me. That is true, but the hon. Gentleman is a member of the Select Committee and he knew on 30th January, because that is when Sir Charles Villiers quoted those words about an upturn in evidence to the Select Committee. The hon. Gentleman knew on 30th January and he knew a week later on 6th February when I went before the Select Committee to give evidence.
Those words of mine about the upturn were quoted by an hon. Member at that meeting, but that hon. Member was not the hon. Member for Mid-Sussex. The only hon. Member to quote those words was myself. It was I who drew the attention of the Select Committee to that passage in my speech. I said:
If the Committee will bear with me, because I think it is important to get this on the record, in column 2136 I said: "The hope is that the upturn that is taking place"—we actually thought an upturn was taking place—"will assist the Corporation".
Even then, the hon. Member for Mid-Sussex did not question me. He certainly was not tongue-tied, because in the next column he took up the questioning again


on something completely different. If he was so disturbed by what I said, why did he not question me then?

Mr. Renton: Would the hon. Gentleman like to direct that question to his hon. Friend the Member for Feltham and Heston (Mr. Kerr) who, as Chairman of the Select Committee, conducted the questioning? They will see that I tried many times at that point to intervene in the Minister's remarks.

Mr. Kaufman: The hon. Gentleman said that when the Secretary of State did not probe and press, he was negligent. The same applies to the hon. Gentleman. Sometimes, other Members have to explain themselves.
Paragraph 17 of the report, to which my hon. Friend the Member for Feltham and Heston has referred, lists a series of what are called "crucial dates" culminating in this quotation:
Sunday 11 September: A meeting took place between the Chairman of the Corporation and the Secretary of State for Industry at which it was agreed to try to accelerate the closure of the Beswick plants.
My hon. Friend the Member for Feltham and Heston has fairly pointed out that the meeting never took place. There was no such meeting and the report offers no evidence to suggest that there ever was such a meeting. I have checked carefully and I find that on that day, Sir Charles Villiers held a meeting with colleagues in the BSC at Windsor. On the same day, my right hon. Friend the Secretary of State was at home with his family at Staveley, Derbyshire, 130 miles away.
Obviously there is a simple explanation. Presumably this was no more than a slip made in the haste of compiling the report. No one would allege that the Select Committee has misled the House in listing this imaginary meeting as a crucial date in its report.
I am sure that the Select Committee would accept that it has as great a duty as Ministers to provide the House with accurate information. As my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) said in an intervention, Select Committees have clear responsibilities to tie House and to the truth.

Mr. Mike Thomas: Will my hon. Friend make it clear that he is prepared to describe this event as a misunderstanding of the evidence and that in no circum-

stances would he describe it as an invention of evidence by the Select Committee?

Mr. Kaufman: I regard it as a slip. Slips can happen.

Mr. Norman Lamont: Mr. Norman Lamont
rose—

Mr. Kaufman: I have a lot to say and many questions to answer. It is right that I should be allowed to speak.
The three reports of the Select Committee deserve better of this House than simply to be subjected to minute textual analysis. They contain many detailed and often constructive recommendations which are being considered carefully by the Government. We shall respond in the way in which the hon. Member for Colne Valley (Mr. Wainwright) said that we should. That is the way to do it. The recommendations also provide a background against which we can consider the current problems of the British Steel Corporation in true perspective.
It was a bleak heritage that private ownership handed over 11 years ago. The First Report describes it like this:
Prior to nationalisation, the Sub-Committee were told, the rate of capital expenditure in the British steel industry was insufficient to maintain the existing equipment and to improve it in line with the substantial technological advances which were being made. It was particularly low in comparison with investments which were being made in the steel industry abroad".
In 1967 the State was handicapped by a backward, primitive steel industry completely uncompetitive against the foreign industries on the Continent and in Japan which had invested and modernised. Before it could tackle that heritage the newly formed British Steel Corporation was confronted with a vindictive Tory Government absolutely intent on making its job impossible. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) and his cronies marched into the Department of Trade and Industry determined to take the axe to the British Steel Corporation.
The outcome of their efforts was a constitutional monstrosity—a joint steering group of civil servants and Corporation officials which was set up in 1971 and which for nearly a year completely hamstrung the activities of the BSC. Paragraph 143 of the First Report describes what happened in these words:
Suspension of investment projects and investment decisions during the period of the


Joint Steering Group between 1971 and 1972 resulted in a lull in investment expenditure and a loss of momentum during the early years of the Strategy which affected the Corporation and plant suppliers alike".
In 1972 Lord Melchett, when chairman of BSC, described to a previous Select Committee what had taken place. He said
We did not really like the whole concept of the joint steering committee. It was really imposed on us in difficult circumstances and it completely broke all the normal routines with regard to dealing with our investment programme and consultations. Some of the time lost can never be made up. The people who were engaged in this very time-consuming inquiry and discussion had to be our top people. While we were engaged in these discussions, writing papers for consideration and so forth, we could not be doing other things".
For nearly a year the control of the Corporation was taken out of the hands of the board—and the Tory Government flatly refused to supply to Parliament any of the reports of that JSG. This is how the responsible Minister sought to justify that refusal:
The report contains such material of a commercial confidential nature that publication would damage the commercial interests of the Corporation by revealing plans and expectations to competitors. It is important that Ministers must retain the right to receive the most confidential information from experts with no punches pulled and with no fear of subsequent publication".
Yet those are the very people who have the nerve to attack this Government for failing to be open with the House—

Sir K. Joseph: Sir K. Joseph rose—

Mr. Kaufman: I will not give way. I have a lot to say. After the Second Report was published—

Sir K. Joseph: Will the hon. Gentleman give way?

Mr. Kaufman: Very well.

Sir K. Joseph: Will the Minister of State tell the House the truth, that it was nationalisation by the Labour Government and then the renewed threat of nationalisation throughout the second half of the 1960s that left this country behind—[HON. MEMBERS: "Rubbish."]—when all our competitors were investing?

Mr. Kaufman: That is the kind of party nonsense that this Select Committee Report demolishes.

Hon. Members: Resign.

Mr. Speaker: Order. Everyone has had a reasonable hearing up to now.

Mr. Kaufman: The Tories have always had a vendetta against the British Steel Corporation, but a vendetta is no substitute for a policy. The Tories have no policy for steel, and today in a debate that they have gratuitously forced they have given us no idea of what they would do with the industry if they had the chance—

Mr. Norman Lamont: Mr. Norman Lamont
rose—

Mr. Kaufman: —but the country and the steel workers have the right to know. They have the right to know what the Tories would do about investment in the industry. The Conservatives voted against investment in the Iron and Steel (Amendment) Bill. The country has the right to know what the Conservatives would do about redundancies. The Select Committee report calls for
a clearly defined specific reduction in the size of the workforce in each of the next five years".
Do the Opposition accept that recommendation—[HON. MEMBERS: "Do you?"] They are calling on the House to approve the report. If they accept that recommendation how—

Mr. Norman Lamont: Will the hon. Gentleman give way?

Mr. Kaufman: Yes, I shall give way because I have lost my voice.

Mr. Norman Lamont: Will the Minister of State now tell us the truth about the reports of the Kauman plan by which, we read in the papers, the Government are planning to leave the British Steel Corporation only as a producer of specialist steels?

Mr. Kaufman: It is utter rubbish. The standards of accuracy of the Daily Mirror have greatly deteriorated since I left the staff.
The Tory Party refused to commit itself on these matters. It has no policies, only vague talk on which it is too craven to commit itself. Last month it was immigrants, and this month it is steel workers.
We shall examine the Select Committee report on its merits and we shall reply


in the way that the House expects us to reply to a Select Committee report of this kind. We shall do what Bill Sirs asked when he told the Select Committee that time was needed in which we can work together with the unions and the

Corporation for a modern industry. That is what we intend to achieve.

Question put, That the amendment be made:—

The House divided: Ayes 302, Noes 254.

Division No. 143]
AYES
[9.59 p.m.


Abse, Leo
Dunnett, Jack
Lambie, David


Allaun, Frank
Eadie, Alex
Lamborn, Harry


Anderson, Donald
Ellis, John (Brigg &amp; Scun)
Lamond, James


Archer, Rt Hon Peter
English, Michael
Latham, Arthur (Paddington)


Armstrong, Ernest
Ennals, Rt Hon David
Leadbitter, Ted


Ashley, Jack
Evans, Fred (Caerphilly)
Lee, John


Ashton, Joe
Evans, Ioan (Aberdare)
Lestor, Miss Joan (Eton &amp; Slough)


Atkins, Ronald (Preston N)
Ewing, Harry (Stirling)
Lever, Rt Hon Harold


Atkinson, Norman
Ewing, Mrs Winifred (Moray)
Lewis, Ron (Carlisle)


Bagier, Gordon A. T.
Faulds, Andrew
Litterick, Tom


Bain, Mrs Margaret
Fernyhough, Rt Hon E.
Lomas, Kenneth


Barnett, Guy (Greenwich)
Fitch, Alan (Wigan)
Loyden, Eddie


Barnett, Rt Hon Joel (Heywood)
Fitt, Gerard (Belfast W)
Luard, Evan


Bates, Alf
Flannery, Martin
Lyon, Alexander (York)


Bean, R. E.
Fletcher, Ted (Darlington)
Lyons, Edward (Bradford W)


Beith, A. J.
Foot, Rt Hon Michael
Mabon, Rt Hon Dr J. Dickson


Benn, Rt Hon Anthony Wedgwood
Ford, Ben
MacCormick, Iain


Bennett, Andrew (Stockport N)
Forrester, John
McDonald, Dr Oonagh


Bidwell, Sydney
Fowler, Gerald (The Wrekin)
McElhone, Frank


Bishop, Rt Hon Edward
Fraser, John (Lambeth, N'w'd)
MacFarquhar, Roderick


Blenkinsop, Arthur
Freeson, Rt Hon Reginald
McGuire, Michael (Ince)


Boardman, H.
Freud, Clement
MacKenzie, Rt Hon Gregor


Booth, Rt Hon Albert
Garrett, John (Norwich S)
Maclennan, Robert


Boothroyd, Miss Betty
Garrett, W. E. (Wallsend)
McMillan, Tom (Glasgow C)


Bottomley, Rt Hon Arthur
George, Bruce
McNamara, Kevin


Boyden, James (Bish Auck)
Gilbert, Dr John
Madden, Max


Bradley, Tom
Ginsburg, David
Magee, Bryan


Bray, Dr Jeremy
Golding, John
Mahon, Simon


Broughton, Sir Alfred
Gould, Bryan
Mallalieu, J. p. W.


Brown, Hugh D. (Provan)
Gourlay, Harry
Marks, Kenneth


Brown, Robert C. (Newcastle W)
Graham, Ted
Marshall, Dr Edmund (Goole)


Buchan, Norman
Grant, George (Morpeth)
Marshall, Jim (Leicester S)


Buchanan, Richard
Grant, John (Islington C)
Mason, Rt Hon Roy


Butler, Mrs Joyce (Wood Green)
Grocott, Bruce
Maynard, Miss Joan


Callaghan, Rt Hon J. (Cardiff SE)
Hamilton, W. W. (Central Flfe)
Meacher, Michael


Callaghan, Jim (Middleton &amp; P)
Hardy, Peter
Mendelson, John


Campbell, Ian
Harrison, Rt Hon Walter
Mikardo, Ian


Canavan, Dennis
Hart, Rt Hon Judith
Millan, Rt Hon Bruce


Cant, R. B.
Hattersley, Rt Hon Roy
Miller, Dr M. S. (E Kilbride)


Carmichael, Nell
Hayman, Mrs Helena
Mitchell, Austin


Carter, Ray
Healey, Rt Hon Denis
Molloy, William


Carter-Jones, Lewis
Heffer, Eric S.
Moonman, Eric


Cartwright, John
Henderson, Douglas
Morris, Alfred (Wythenshawe)


Castle, Rt Hon Barbara
Hooley, Frank
Morris, Charles R. (Openshaw)


Clemitson, Ivor
Hooson, Emlyn
Morris, Rt Hon J. (Aberavon)


Cocks, Rt Hon Michael (Bristol S)
Horam, John
Moyle, Roland


Cohen, Stanley
Howell, Rt Hon Denis (B'ham, Sm H)
Mulley, Rt Hon Frederick


Coleman, Donald
Howells, Geraint (Cardigan)
Murray, Rt Hon Ronald King


Colquhoun, Ms Maureen
Hoyle, Doug (Nelson)
Newens, Stanley


Conlan, Bernard
Huckfield, Les
Noble, Mike


Corbett, Robin
Hughes, Rt Hon C. (Anglesey)
Oakes, Gordon


Cowans, Harry
Hughes, Robert (Aberdeen N)
Ogden, Eric


Cox, Thomas (Tooting)
Hughes, Roy (Newport)
O'Halloran, Michael


Craigen, Jim (Maryhill)
Hunter, Adam
Orbach, Maurice


Crawford, Douglas
Irvine, Rt Hon Sir A. (Edge Hill)
Orme, Rt Hon Stanley


Crawshaw, Richard
Irving, Rt Hon S. (Dartford)
Ovenden, John


Cronin, John
Jackson, Colin (Brighouse)
Padley, Walter


Crowther, Stan (Rotherham)
Jackson, Miss Margaret (Lincoln)
Palmer, Arthur


Cryer, Bob
Janner, Greville
Pardoe, John


Cunningham, G. (Islington S)
Jay, Rt Hon Douglas
Park, George


Cunningham, Dr J. (Whiteh)
Jeger, Mrs Lena
Parker, John


Davidson, Arthur
Jenkins, Hugh (Putney)
Parry, Robert


Davies, Bryan (Enfield N)
John, Brynmor
Pavitt, Laurie


Davies, Denzil (Llaneill)
Johnson, James (Hull West)
Pendry, Tom


Davies, Ifor (Gower)
Johnson, Walter (Derby S)
Panhaligon, David


Davis, Clinton (Hackney C)
Jones, Alec (Rhondda)
Perry, Ernest


Deakins, Eric
Jones, Barry (East Flint)
Phipps, Dr Colin


Dean, Joseph (Leeds W)
Jones, Dan (Burnley)
Price, William (Rugby)


Dell, Rt Hon Edmund
Judd, Frank
Radice, Giles


Dempsey, James
Kaufman, Gerald
Rees, Rt Hon Merlyn (Leeds S)


Dolg, Peter
Kelley, Richard
Reid George


Dormand, J. D.
Kerr, Russell
Richardson. Miss Jo


Douglas-Mann, Bruce
Kilroy-Silk, Robert
Roberts, Albert (Normanton)


Duffy, A. E. P.
Kinnock, Neil
Roberts, Gwilym (Cannock)




Robinson, Geoffrey
Stallard, A. W.
Walker, Terry (Kingswood)


Roderick, Caerwyn
Steel, Rt Hon David
Ward, Michael


Rodgers, George (Chorley)
Stewart, Rt Hon Donald
Watkins, David


Rodgers, Rt Hon William (Stockton)
Stewart, Rt Hon M. (Fulham)
Watkinson, John


Rooker, J. W.
Stoddart, David
Watt, Hamish


Roper, John
Stott, Roger
Weetch, Ken


Rose, Paul B.
Strang, Gavin
Weitzman, David


Ross, Stephen (Isle of Wight)
Strauss, Rt Hon G. R.
Wellbeloved, James


Ross, Rt Hon W. (Kilmarnock)
Summerskill, Hon Dr Shirley
Welsh, Andrew


Rowlands, Ted
Swain, Thomas
White, Frank R. (Bury)


Ryman, John
Taylor, Mrs Ann (Bolton W)
White, James (Pollok)


Sandelson, Neville
Thomas, Dafydd (Merioneth)
Willey, Rt Hon Frederick


Sedgemore, Brian
Thomas, Jeffrey (Abertillery)
Williams, Rt Hon Alan (Swansea W)


Selby, Harry
Thomas, Mike (Newcastle E)
Williams, Alan Lee (Hornch'ch)


Sever, John
Thomas, Ron (Bristol NW)
Williams, Rt Hon Shirley (Hertford)


Shaw, Arnold (Ilford South)
Thompson, George
Wilson, Alexander (Hamilton)


Sheldon, Rt Hon Robert
Thorne, Stan (Preston South)
Wilson, Gordon (Dundee E)


Shore, Rt Hon Peter
Thorpe, Rt Hon Jeremy (N Devon)
Wilson, Rt Hon Sir Harold (Huyton)


Short, Mrs Renee (Wolv NE)
Tierney, Sydney
Wilson, William (Coventry SE)


Silkin, Rt Hon John (Deptford)
Tinn, James
Wise, Mrs Audrey


Silkin, Rt Hon S. C. (Dulwich)
Tomlinson, John
Woodall, Alec


Sillars, James
Tomney, Frank
Woof, Robert


Silverman, Julius
Torney, Tom
Wrigglesworth, Ian


Skinner, Dennis
Tuck, Raphael
Young, David (Bolton E)


Smith, John (N Lanarkshire)
Varley, Rt Hon Eric G.



Snape, Peter
Wainwright, Edwin (Dearne V)
TELLERS FOR THE AYES:


Spearing, Nigel
Wainwright, Richard (Colne V)
Mr. Joseph Harper and


Spiggs, Leslie
Walker, Harold (Doncaster)
Mr. James Hamilton.




NOES


Adley, Robert
du Cann, Rt Hon Edward
Howe, Rt Hon Sir Geoffrey


Aitken, Jonathan
Durant, Tony
Howell, David (Guildford)


Alison, Michael
Dykes, Hugh
Hunt, David (Wirral)


Amery, Rt Hon Julian
Eden, Rt Hon Sir John
Hunt, John (Ravensbourne)


Arnold, Tom
Edwards, Nicholas (Pembroke)
Hurd, Douglas


Atkins, Rt Hon H. (Spelthorne)
Elliott, Sir William
Hutchison, Michael Clark


Atkinson, David (Bournemouth, East)
Emery, Peter
Irving, Charles (Cheltenham)


Awdry, Daniel
Eyre, Reginald
James, David


Baker, Kenneth
Fairbairn, Nicholas
Jenkin, Rt Hon P. (Wanst'd&amp;W'df'd)


Banks, Robert
Fairgrieve, Russell
Jessel, Toby


Bell, Ronald
Farr, John
Johnson Smith, G. (E Grinstead)


Bennett, Sir Frederic (Torbay)
Fell, Anthony
Jones, Arthur (Daventry)


Bennett, Dr Reginald (Fareham)
Finsberg, Geoffrey
Jopling, Michael


Benyon, W.
Fisher, Sir Nigel
Joseph, Rt Hon Sir Keith


Biffen, John
Fletcher, Alex (Edinburgh N)
Kaberry, Sir Donald


Biggs-Davison, John
Fookes, Miss Janet
Kershaw, Anthony


Blaker, Peter
Forman, Nigel
Kimball, Marcus


Body, Richard
Fowler, Norman (Sutton C'f'd)
King, Evelyn (South Dorset)


Boscawen, Hon Robert
Fox, Marcus
King, Tom (Bridgwater)


Bottomley, Peter
Fraser, Rt Hon H. (Stafford &amp; St)
Kitson, Sir Timothy


Bowden, A. (Brighton, Kemptown)
Fry, Peter
Knight, Mrs Jill


Boyson, Dr Rhodes (Brent)
Galbraith, Hon T. G. D.
Knox, David


Brittan, Leon
Gardiner, George (Reigate)
Lamont, Norman


Brocklebank-Fowler, C.
Gardner, Edward (S Fylde)
Langford-Holt, Sir John


Brooke, Peter
Gilmour, Rt Hon Ian (Chesham)
Latham, Michael (Melton)


Brotherton, Michael
Gilmour, Sir John (East Fife)
Lawrence, Ivan


Brown, Sir Edward (Bath)
Glyn, Dr Alan
Lawson, Nigel


Bryan, Sir Paul
Goodhart, Philip
Lester, Jim (Beeston)


Buchanan-Smith, Alick
Goodhew, Victor
Lewis, Kenneth (Rutland)


Buck, Antony
Goodlad, Alastair
Lloyd, Ian


Budgen, Nick
Gorst, John
Loveridge, John


Bulmer, Esmond
Gow, Ian (Eastbourne)
Luce, Richard


Burden, F. A.
Gower, Sir Raymond (Barry)
McCrindle, Robert


Butler, Adam (Bosworth)
Gray, Hamish
Macfarlane, Neil


Bendall, Vivian (Ilford North)
Grieve, Percy
MacGregor, John


Carlisle, Mark
Griffiths, Eldon
MacKay, Andrew (Stechford)


Chalker, Mrs Lynda
Grist, Ian
Macmillan, Rt Hon M. (Farnham)


Churchill, W. S.
Grylls, Michael
McNair-Wilson, M. (Newbury)


Clark, Alan (Plymouth, Sutton)
Hamilton, Michael (Salisbury)
McNair-Wilson, P. (New Forest)


Clark, William (Croydon S)
Hampson, Dr Keith
Madel, David


Clarke, Kenneth (Rushcliffe)
Hannam, John
Marshall, Michael (Arundel)


Clegg, Walter
Harrison, Col Sir Harwood (Eye)
Marten, Neil


Cockroft, John
Haselhurst, Alan
Mates, Michael


Cooke, Robert (Bristol W)
Hastings, Stephen
Mather, Carol


Cope, John
Havers, Rt Hon Sir Michael
Maude, Angus


Cormack, Patrick
Hawkins, Paul
Maudling, Rt Hon Reginald


Costain, A. P.
Hayhoe, Barney
Mawby, Ray


Critchley, Julian
Heath, Rt Hon Edward
Maxwell-Hyslop, Robin


Crouch, David
Heseltine, Michael
Mayhew, Patrick


Crowder, F. P.
Hicks, Robert
Meyer, Sir Anthony


Davies, Rt Hon J. (Knutsford)
Higgins, Terence L.
Miller, Hal (Bromsgrove)


Dean, Paul (N Somerset)
Hodgson, Robin
Mills, Peter


Dodsworth, Geoffrey
Holland, Philip
Miscampbell, Norman


Drayson, Burnaby
Hordern, Peter
Mitchell, David (Basingstoke)







Moate, Roger
Rees, Peter (Dover &amp; Deal)
Stewart, Ian (Hitchin)


Monro, Hector
Renton, Rt Hon Sir D. (Hunts)
Stokes, John


Montgomery, Fergus
Renton, Tim (Mid-Sussex)
Tapsell, Peter


Moore, John (Croydon C)
Rhodes James, R.
Taylor, R (Croydon NW)


More, Jasper (Ludlow)
Ridley, Hon Nicholas
Taylor, Teddy (Cathcart)


Morgan, Geraint
Ridsdale, Julian
Tebbit, Norman


Morris, Michael (Northampton S)
Rifkind, Malcolm
Temple-Morris, Peter


Morrison, Charles (Devizes)
Roberts, Wyn (Conway)
Thatcher, Rt Hon Margaret


Morrison, Hon Peter (Chester)
Rossi, Hugh (Hornsey)
Thomas, Rt Hon P (Hendon S)


Mudd, David
Rost, Peter (SE Derbyshire)
Townsend, Cyril D.


Neave, Airey
Royle, Sir Anthony
Trotter, Neville


Nelson, Anthony
Sainsbury, Tim
van Straubenzee, W. R.


Neubert, Michael
St. John-Stevas, Norman
Vaughan, Dr Gerald


Newton, Tony
Scott, Nicholas
Viggers, Peter


Nott, John
Shaw, Giles (Pudsey)
Wakeham, John


Onslow, Cranley
Shelton, William (Streatham)
Walder, David (Clitheroe)


Oppenheim, Mrs Sally
Shepherd, Colin
Walker, Rt Hon P (Worcester)


Page, John (Harrow West!
Shersby, Michael
Wall, Patrick


Page, Rt Hon R. Graham (Crosby)
Silvester, Fred
Walters, Dennis


Page, Richard (Workington)
Sims, Roger
Warren, Kenneth


Parkinson, Cecil
Sinclair, Sir George
Weatherill, Bernard


Pattie, Geoffrey
Skeet, T. H. H.
Wells, John


Percival, Ian
Smith, Dudley (Warwick)
Whitelaw, Rt Hon William


Peyton, Rt Hon John
Smith, Timothy John (Ashfield)
Wiggin, Jerry


Pink, R. Bonner
Speed, Keith
Winterton, Nicholas


Prentice, Rt Hon Reg
Spence, John
Wood, Rt Hon Richard


Price, David (Eastleigh)
Spicer, Michael (S Worcester)
Young, Sir G. (Ealing, Acton)


Prior, Rt Hon James
Sproat, lain
Younger, Hon George


Pym, Rt Hon Francis
Stainton, Keith



Raison, Timothy
Stanbrook, Ivor
TELLERS FOR THE NOES:


Rathbone, Tim
Stanley, John
Mr. Anthony Berry and


Rawlinson, Rt Hon Sir Peter
Steen, Anthony (Wavertree)
Mr. John Stradling Thomas,

Question accordingly agreed to

Main Question, as amended, put and agreed to.

Resolved,

That this House takes note of the First, Second and Fifth Reports from the Select Committee on Nationalised Industries, and accordingly calls upon Her Majesty's Government to bring forward proposals in consultation with the British Steel Corporation and the trade unions to secure a future for a modern competitive and profitable industry.

BRITISH RAILWAYS (SELBY) BILL

Order for Second Reading read.

Mr. Speaker: I must inform the House that I have not selected the amendment.

10.16 p.m.

Mr. George Cunningham: I beg to move, That the Bill be now read a Second time.
This is a Private Bill promoted by the British Railways Board and I have been asked by the Board to explain its purpose to the House.
The purpose of the Bill is to allow British Rail to divert about 15 miles of the East Coast main line south of York to a new line of route which it is proposed should be about four miles further west than the present line of route. The present line between Selby and York lies over the new Selby coalfield. Unless the line is moved, it will not be possible fully and efficiently to extract the coal. If the line stays where it is, it would need to be supported by the coal underneath which would otherwise be extracted.
The coalfield as a whole has resources amounting to 600 million tons. That coal is expected to be extracted over a period of 30 years and at a rate of 10 million tons a year, leaving considerable resources in the ground. In other words, we are talking of a major coal resource and a major operation in terms of jobs. If the line stays where it is, 40 million tons of coal will have to remain unextracted to form support for the present line, and a lot more will prove to be unextractable because of the secondary effects of the mining operations slightly further from the line.
The House will surely agree that in those circumstances the line has to be moved. British Rail's proposal is that a new line should be constructed from a point about four miles south of Selby going roughly north-west, and then north to join the present Leeds to York line about five miles out of York. The present line from Selby to York will cease to operate when the diversion is completed. If it is accepted that some diversion of the present main line is needed—and I think that is accepted even by oppo-

nents of the Bill—the only question is what the route of the diversion should be.
The House rightly affords to persons and authorities outside Parliament the right to dispute proposals affecting private interests before a Private Bill Committee of this House. The same procedure applies in the House of Lords. Objectors will be able to present their cases to the Committee, and if the House decides tonight to give the Bill a Second Reading that is the proper way for the pros and cons of the proposal to be judicially and impartially assessed.
I invite the House to give the Bill a Second Reading so that it may proceed to the rigorous procedures of the Private Bill Committee. If it is necessary to do so, I hope that the House will allow me to respond to any specific questions at the end of the debate.

10.18 p.m.

Mr. Michael Alison: I am opposed to this Bill and I seek to block it.
I am opposed to the Bill for two separate sets of reasons. The first broad reason is that the Bill and the associated plans submitted to the Private Bill Office set out a proposed route for the diversion of the East Coast main line which, in my view, is neither the most economical in terms of cash cost nor of agricultural land use involved. My second main heading of objection is that this costly project has not been properly appraised or examined in public in a way that would have been necessary if a motorway were involved.
I am pretty well convinced that the East Coast main line should be diverted because of the Selby coal workings. I am no expert on these matters—and that is one of the reasons why I oppose this Bill—but I do not think that the Selby coalfield and the extractions of coal there are feasible without some action being taken in respect of the railway line. From the point of view of a layman the matter is not clear beyond peradventure.
For example, all that happened at the public inquiry held at Selby about the coalfield development was that at the very end of the long inquiry about the viability of the coalfield project, and after many of the legal advisers of the various


petitioners and objectors to the development had left, British Railways came along and dropped a bombshell by saying that consideration might have to be given to altering the route of the railway line. That was surprising and caused quite a stir. They did not say that a diversion would be necessary; they merely said that consideration might have to be given to making a diversion. That was the most that we were told at the tailend of the inquiry.
In the statement that they have made to the House of their reasons for the Bill the railway authorities do not present quite a full and clear picture. There was no explicit statement that could be properly cross-examined by counsel at the public inquiry that it was unavoidable, essential and inescapable that the route would have to be diverted. It was merely said that consideration might have to be given to altering the route of the line as a result of the scale of coal extraction that was proposed in the locality. If we are to take that amount of coal from the coalfield and it is to go under the railway line, it seems obvious to me as a layman that we must do something about the railway line.
There was no proper examination against a background of assessors and experts being cross-examined about the absolute and inescapable need for that to happen for the stability of the railway line, especially as regards the water table.

Sir Timothy Kitson: Is my hon. Friend aware that at that time British Railways did not even inform the county council, which had to decide alternative routes through the highways committee? It was only at the inquiry that the county council heard that a diversion was expected.

Mr. Alison: I am grateful to my hon. Friend for making that clear. That underlines that, instead of the normal procedure being followed, when a planning application is made to the local authority and consent is sought from the local planning body for a major undertaking, which enables a public inquiry to be held in its own right, all that we were told at the tailend of the public inquiry was that consideration might have to be given to diverting the railway line.
The next thing that we hear is that the Bill has been presented to Parliament with the whole issue cut and dried. We hear that the route has been selected, the decision having been made that it is necessary to divert the line. Everything is announced in a definitive and final form before the local planning authority has even exercised the proper and statutory function of appraising the necessity for a diversion.
We are talking about a major railway operation. We are talking about the building of a major new railway line. As proposed, it will be 14 miles long and will cost at least £35 million. I may add that in my view that is an underestimate of the cost. The British Railways official costing document, which has been submitted to the House, gives a figure of £35 million for the 14-mile diversion, but the cost could be a great deal more if, for example, British Gypsum's petition against the Bill is heard.
British Gypsum claims in its petition against the Bill that the loss of the minerals, upon which its operations depend at Sherburn in Elmet, as a result of the preferred route is likely to amount to about £25 million. If that is added as a compensation cost to the £35 million that will have to be spent on the physical work of diverting the line, we are landed with a possible overall cost for the new line of anything between the present figure submitted by British Railways of £35 million and an extra £10 million, £15 million or even £25 million. That takes us to £30 million or £40 million as the final cost, including the compensation to British Gypsum for the removal of this line.
I should add, for the benefit of hon. Members who have a special interest in the coal industry, that the National Coal Board, not British Rail, will have to pay for the cost of the diversion to enable oil-burning trains to go at high speed across the Vale of York. The money will have to come from somewhere. It will come from some of the NCB's proposed capital projects or find itself added to the ultimate price of coal.

Mr. Giles Shaw: As the cost described by my hon. Friend is to be levied as a charge on the National Coal Board, how does that compare with the possibility of leaving a pillar of coal beneath the line itself?

Mr. Alison: The difference is substantial in cost terms. The loss from leaving a mile wide pillar of coal is between £500 million and £800 million, according to estimates that I have seen. The NCB will get compensation from British Rail for that equation. Therefore, the NCB will not lose money and there will be no cost to the coal industry. But, under the terms of the Bill, British Rail will be running its oil-fired trains across this stretch of land and the NCB will have to carry the can.
The object of my attempt to appraise the real cost is to show that it would be in the interests of the NCB to support an attempt to find a cheaper alternative route. There is a cheaper alternative.

Mr. Ian Gow: Is the £35 million going to fall upon the National Coal Board or upon British Rail? If it is to fall on the NCB, it is a matter of the most grievous concern to hon. Members representing mining constituencies.

Mr. Alison: The only inaccuracy in my hon. Friend's question was the £35 million. I think that it will be more than £35 million because of the compensation aspect to which I referred. The £35 million plus will be a charge on the NCB, so the NCB will pay for the diversion.
The substance of my opposition to the cut and proposition that British Rail has put before us is that there is a reasonable alternative route. I must ask the indulgence of the House to refer to a technical point, because there are a number of alternative routes. When British Rail was thinking about this matter, it published certain maps, and I have one here. There is an important alternative route technically known as the Sherburn deviation. As an alternative to British Rail's proposed route, the Sherburn deviation would involve about two-thirds less land take and probably two-thirds less cost.

Mr. George Grant: I appreciate the hon. Gentleman's argument, but he must also take into consideration that this scheme has been carefully thought out. Although he might have views on certain interests of the people who own land in the area, the National Coal Board and the planning authorities have gone deeply into the scheme, and it has advanced so far that it would be

costly to delay it. What would be the difference in cost between the scheme he is proposing and the scheme that has already been carefully considered?

Mr. Alison: The hon. Member for Morpeth (Mr. Grant) has made a fair point in suggesting that British Railways have considered all the alternatives and have come up with the one they prefer. There is no doubt that British Railways have examined all the alternatives. I know that the hon. Gentleman is interested in the coal industry, but what happened was this.
British Railways suddenly saw a marvellous opportunity to build on a green field site a brand new railway line which they could justify on grounds of speed, and speed alone. There is already a severe restriction in Selby, because the existing line has a sharp curve which the trains have to go round to get out of the town. British Railways saw a marvellous opportunity, in the context of Selby coalfield, to build a magnificent brand new stretch of line, 14 miles long, perfectly suited to their railway operations.
Being a public authority, British Railways do not have to worry too much about costs. They had absolutely no regard to less satisfactory alternatives from a railway point of view which would cost the coal industry and the public somewhat less.
All I am suggesting is that British Railways should at least have gone through the statutory procedures involved in a proper planning application to the local authorities so that we could all decide whether it was right that they should build this brand new track across the Vale of York, involving a second major bridge across the Rive Ouse, which is very expensive, when the Sherburn deviation, which is at least one-third and probably two-thirds shorter than the line British Railways are proposing, would enable them to take the railway line into the existing system running between York and Sheffield. They would feed into that line south of the River Ouse, would not have to build a second bridge across the river and would probably take up two-thirds less agricultural land. They would find only one serious objection to the course I am proposing, the Sherburn deviation, which is that the trains would not be able to go quite so fast.

Mr. George Grant: With due respect, the hon. Gentleman has not answered my question. While I have some consideration for what the hon. Gentleman is proposing, I am saying that these matters have already been considered by the National Coal Board, British Railways and the local planning committee. I am asking whether the hon. Gentleman has taken into consideration in the overall cost of the scheme the cost to the National Coal Board of the work it has done and the importance to the nation of getting the Selby coalfield going. He seems to be talking about the economic grounds, but I think that he is missing the point.

Mr. Alison: I take the point that the hon. Gentleman is arguing I recognise the general validity of his argument. It is that in terms of developing the coalfield speed is money. That is a perfectly fair point. The longer we delay the operation of the Selby coalfield, for whatever reason, the greater the loss to the nation of economically mineable coal. The Selby coalfield take will not get anywhere near the railway line about which we are talking until 1980, 1981 or 1982, there is no great hurry about it. It is not as though a dispute about the correct line at this stage would have the effect of delaying the operation of the Selby coalfield, even remotely.

Mr. Peter Hardy: There is another factor as well as speed, and the hon. Member should attend to it. Whilst he is seeking to make alterations to the existing system, he must bear in mind that the Selby coalfield will produce 10 million tons of coal a year, which I hope that British Rail and the NCB will wish to see transported by rail rather than by road, and the existing railway system may not be able to cope with that quantity of coal without substantial alterations.

Mr. Alison: I entirely take that point. I do not dispute that at all. I recognise that the coal must come out and that it will be very economically minable coal when the time comes. I recognise that there must be a proper railway system for shifting the coal from the Selby coalfield, and that this will probably be on the existing Hull-Leeds line, which runs east-west or west-east through Selby. But when we are talking about what I

am here describing as the Sherburn deviation, the hon. Member will recall that we are not talking about using the existing rail network at all.
I am conceding the point, for the sake of argument, that it may be necessary for there to be a new railway line built, and a new railway line in the locality of Selby. But what I am disputing is whether it is really necessary for the extent of the line that the Bill proposes to be new when, by building a very much shorter stretch with a slightly sharper curve, feeding into the existing railway network north-south, slightly nearer Selby, we should avoid the necessity of building a second bridge over the river, we should come into the existing network much earlier, and there would be only one objection to it. Indeed, it is the only objection that I have heard argued—in an informal way, because there has been no public scrutiny of this matter.
There has been only one objection that I have heard informally argued against the Sherburn deviation—a deviation of new railway about two-thirds shorter than that proposed in the Bill. It is simply that trains would not be able to go so fast. Is it really worth spending the sum of money that we are considering here—£35 million; perhaps up to £40 million—to ensure that railway trains can go that much faster over the stretch of line? I do not for a moment believe that it is.
Let me just give the arguments on the other side.

Mr. Albert Roberts: It is all very well making a suggestion like that, but the hon. Member knows perfectly well that it would interfere with the inter-city services. The hon. Member must bear in mind that in the late 1980s we shall have an output of almost 10 million tons of coal and that there will be daily a tremendous amount of coal going from the coalfield to the power stations. That is one of the main reasons why the Sherburn route that he has been suggesting is not acceptable.

Mr. Alison: Great though my respect for the hon. Gentleman is, as he knows—he is my neighbour in Yorkshire—I am afraid that he has got that wrong in this case, because the Sherburn deviation is a new railway line. It is the British Railways proposed new line as far as


just north of Selby. Instead of going straight across the Vale of York for 14 miles, necessitating the building of a new bridge, the Sherburn deviation—a brand new railway line, I concede that; the hon. Member is getting a new railway line out of this proposal—turns fairly sharply to the west and dovetails into the main line, which the British Railways preferred line hits 14 miles further north. It will be slightly further south, but it will not necessitate a second bridge and will require perhaps only one-third as much track. There will be a new line and there will be no interruption in the traffic of coal trains from the Selby coal field.

Mr. George Cunningham: Is the hon. Gentleman assuming that it would not be necessary to double the track on the Leeds-York line north of the point where his new junction joins that line?

Mr. Alison: The line at that point is already four track. There is not much of a problem. We shall be dovetailing into a four-track line instead of hitting it 14 miles further north, having had to build a new bridge across the river. The existing track would be joined 10 miles further south, no new bridge would be necessary and the new line would link the old North-Eastern line with the existing York-Sheffield line. The only disadvantage would be a reduction in the speed of trains.
British Rail says that its £75 million investment in high-speed trains would be abortive if there were a serious hold up of trains over this stretch of track. That is not a convincing argument, because the high-speed trains will be running from May and the £75 million investment is for the whole of the 400 track miles from London to Edinburgh. High-speed trains will have to slow when they hit Selby, as anyone who has been through Selby to Edinburgh, York or Newcastle, will know. The existing main line has a sharp jig in it and trains have to slow appreciably at present.
As far as I know, British Rail had no proposals for straightening the Selby curve so, if it had not been for the Selby coalfield development, the highspeed trains would have taken a serious curve at Selby in their stride. Despite the curve, British Rail still believes its £75 million investment to be worth while.
All we are suggesting is that instead of the Selby curve, which will be removed by the new track, we should have the Sherburn deviation curve, which would have the same effect upon the running of high-speed trains as would the Selby curve. It must be justifiable in logic, because otherwise British Rail would not be planning to start the high-speed train in May along the line that includes the Selby curve.

Mr. Douglas Jay: Surely the weakness in the hon. Gentleman's argument is that if his alternative is adopted instead of British Rail's proposal, from the moment the change is completed and indefinitely thereafter the time taken by every train between York and Doncaster would be longer.

Mr. Alison: That is not the point that I was making. High-speed trains are starting in May. They will make the journey over the 400 track miles from London to Edinburgh very much more quickly despite their having to negotiate a sharp curve at Selby. British Rail has decided that the £75 million investment is worth while, despite the Selby curve, because so much time can be saved on the whole journey that a lot of money will also be saved. All I am proposing is that, in order to save a considerable sum, British Rail should incorporate the deviation that I am proposing. It will involve a less serious curve than the existing curve at Selby. British Rail will still save time, though not as much as it would save with a straight track.

Mr. Jay: I understand that, But let us suppose that the alternative is adopted and takes until 1981 to be completed. From that moment all trains will take longer to travel between York and Don-caster for an indefinite number of years. That is the reason for preferring the British Rail proposal.

Mr. Alison: I concede that. The British Rail preferred route does away with any curve in that locality, but British Rail is buying it at a colossal cost. It will have to drive a new line straight through the Vale of York and use prime agricultural land. It will also have to build a new bridge.
It is an extraordinary phenomenon. British Rail has invested £75 million to bring the whole of the 400 mile track-miles to high speed standard and for this


14 miles it will spend another 50 per cent, of the total cost. That is the British Rail estimate. I believe that it is an underestimate of the cost. If the Sherburn deviation is adopted, although there will still be a new line, the cost will be substantially less.
No public debate or scrutiny has taken place. I suspect that the total sum will be greater than £75 million. There should be a proper independent inquiry. If British Rail had had to apply to the planning authorities for permission to adopt the route, a proper cost benefit analysis would take place. British Rail would be told that it was buying a marginal increase in speed at a high cost to the public and that it should take a slightly less speedy route to save public money.
The issue should be examined openly in the way in which motorway proposals are examined. We are talking about a 14-mile stretch of line which will cost per mile double what it costs to build a motorway. A new motorway costs about £1½ million per mile. This stretch of railway line will cost £2½ million—and possibly £3 million—per route mile.
The Minister has been helpful. He showed considerable sympathy and sensitivity about the building of what is known in Yorkshire as the Kirkhamgate-Dishforth motorway. He will know the long history of the proposal to build 20 route-miles of new motorway across the West Riding through Leeds and Bradford to the motorway system north of Wetherby. Does the Minister recall that?

Mr. Deputy Speaker (Sir Myer Galpern): We are discussing a proposed railway line, not motorways.

Mr. Alison: I naturally accept any rebuke from you, Mr. Deputy Speaker. A rebuke from you is usually so relevant that it is almost desirable to receive one. But I hope that I shall persuade you that it is legitimate in evaluating the Bill to contrast the procedures involved in planning a new railway with the procedures for planning a motorway. Both such projects ultimately come within the ambit of the Minister who is with us tonight.
Proposals for the motorway were first mooted in about 1975. The Department produced a public statement of its intentions to build a new motorway in that part of the country. It then imaginatively and

quite properly produced a popular and informative brochure for distribution to-the public and entitled
Yorkshire to the North East—We need your views".
It was supplemented by access points throughout this part of Yorkshire at which the public could view the proposed new development and consider the alternatives, all of which were costed out in terms of land use, financial cost, traffic flows, loss of houses, loss of land and the rest. Caravans were located in the towns and villages of the area at which the public could meet ministerial advisers who dealt with queries.
This shows how imaginative the Department was in trying to win acceptance of the proposals. Finally, a poll was held of local views. The Minister came to Yorkshire and spent the day with my hon. Friends and myself, touring around to examine the various alternatives and options. That was only the beginning, because he then went on to consider the results of the poll and the advice of the economic planning council, of the North Yorkshire and West Yorkshire County Councils, and of the Leeds and Bradford City Councils. Finally, he produced his draft proposals for the route that he preferred. That is only the beginning of the statutory procedures. Under the Highways Act there must now be a full examination of any objections produced by any individual objector and, if necessary, a full public inquiry into the line selected. Why, if it is right for a motorway, which is cheaper to build, to go through that sort of procedure, is it right for the decision to build a railway line to be announced without any inquiry, without the selected route being announced, without there being any consultation, and with a Bill such as this being presented?

Mr Jay: If the hon. Member is comparing the procedures as between a motorway and a railway, will he remind the House that with a motorway it is not necessary to carry a Private Bill through Parliament where it will be examined in detail by a Committee? If the project in question had been a motorway the hon. Gentleman would not have been able to make his speech tonight and we should not have been able to take a vote.

Mr. Alison: It is possible to vary our procedures to suit what is most appropriate.

Several Hon. Members: Several Hon. Members
rose—

Mr. Deputy Speaker: Order. These interventions will slow the speed of the debate.

Sir T. Kitson: I am trying to slow the speed by suggesting to my hon. Friend that on the recommendation of the Minister the line that this motorway will take will mean that it will take 30 minutes longer to get from A to B than if the suggestion of improving the Al were accepted. But British Rail's suggested time-saving is a matter of only four minutes on a similar line.

Mr. Alison: That is a very relevant point. I give way to my hon. Friend the Member for Pudsey (Mr. Shaw).

Mr. Deputy Speaker (Sir Meyer Galpern): Has the hon. Gentleman accepted the point?

Mr. Alison: Yes, Mr. Deputy speaker, and I give way to my hon. Friend.

Mr. Giles Shaw: I remind my hon. Friend, in answer to the point raised by the right hon. Member for Battersea, North (Mr. Jay), that the whole consultation process in the motorway development which the right hon. Gentleman accurately described was brought about by new legislation recognising the great desire of the interested parties, the motorway "consumers" and others affected, to have a share in consultation and decision-making. Under this procedure those affected are not given that degree of consultation.

Mr. Alison: The trouble about the railway proposal is that we are starved of the essential data, apart from anything else. We want to know what time-saving would be secured by British Rail's driving its most expensive and ideal route across the Vale of York compared with the Sherburn deviation. The data should be available for the purposes of public discussion.

Mr. Gow: Does my hon. Friend appreciate, in answering the point made by the right hon. Member for Battersea, North (Mr. Jay), to whom in this context I almost refer as "my right hon.
Friend", that the right hon. Gentleman is one of the heroes of this Parliament, in that he has fought the great battle about the new Winchester motorway? The right hon. Gentleman, who says that a Bill would not have been required for that, would very much have welcomed a Bill's being necessary for that exercise.

Mr. Alec Woodall: Let us get back to Selby.

Mr. Alison: What my hon. Friend the Member for Eastbourne (Mr. Gow) said is very relevant. That is exactly the contrast we want to make.
We are presented with a Bill when
British Rail has pre-determined its ideal solution without proper scrutiny or any planning authority—no formal planning application, no proper submission of a clear-cut plan at the Selby coalfield inquiry. British Rail simply comes forward with the Bill, the main purpose of which is to secure compulsory purchase powers over the land of the farms it has decided to invade and cross. Forty-nine separate farms are involved—

Sir Paul Bryan: Sixty-eight.

Mr. Alison: My hon. Friend may De able to make a correction in his own speech. The bulk of the farmers have not yet received a formal or official approach from British Rail. They do not know where they stand or in what way they will be involved.
British Rail having decided what route, it wants, under the parliamentary petitioning procedures for a Private Bill it is left to the individual tenant farmer, a working man spending his waking hours doing his job. How can he possibly go through all the elaborate processes of briefing parliamentary agents, producing a formal petition according to the petitionary process of a Private Bill? How are these wretched, hard-working individual small tenant farmers expected to go through the whole gamut of petition and scrutinising of the Bill through the Select Committee procedure?
The process is unsatisfactory. With a motorway there is a proper planning application, with the local plan published locally and with the local people able to see what is involved and then submit objections, which are properly heard if necessary by an independent inspector and finally a ministerial scrutineer.
I hope that the Minister will advise his hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) that he is prepared to examine the implications of the Bill and advise British Rail to withdraw it and return later this Session with an alternative, after a proper public inquiry of the sort he acknowledges may be necessary for the Kirkhamgate to Dishforth motorway. If we had the same process of consultation as in that case, I should readily sit down and urge my hon. Friends not to vote against the Bill when the time came.
But, without an undertaking that British Rail will be made to justify this extremely expensive, Draconian piece of new railway construction, with proper consideration of a viable cheaper alternative of the kind I have suggested, the Sherburn deviation, I cannot see how I can do other than to vote against the Second Reading.

11.0 p.m.

The Under-Secretary of State for Transport (Mr. John Horam): I think it would be helpful if I intervened at this point in the debate to explain the Government's attitude to the Bill. It will please you, Mr. Deputy Speaker, that I say I am not going into the Dishforth trunk road scheme, nor into a comparison of this procedure with that one, except to say that my right hon. Friend the Member for Battersea, North (Mr. Jay) put the essential point when he pointed out that for historical reasons there are different procedures for a motorway and for a railway, and both are being complied with properly.
As my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) has already explained, the purpose of the Bill is to enable British Railways to divert their East Coast main line around the Selby coalfield. The need for a diversion was established at the public inquiry in 1975 into the Selby coalfield development. The hon. Member for Barkston Ash (Mi. Alison) made a strong point of this in the final part of his speech. That inquiry lasted 37 days. The diversion was mentioned as early as the third day of the public inquiry and there was a full investigation of all the ramifications of that point.

Mr. Alison: The Minister will accept that there was no proper cross-examination of the British Railways evidence in that inquiry because it was felt it was marginal and was presented in explicit form so late that there was no opportunity for a proper cross-examination process.

Mr. Horam: I would not accept that. It was mentioned as early as the third day and later, I agree, there was a proper deployment of the case for a diversion, in my view, there was a full examination at that inquiry.
Two factors were identified at the inquiry which make a diversion essential Both were mentioned by my hon. Friend the Member for Islington, South and Finsbury, who is sponsoring the Bill. First, severe subsidence problems are caused by a combination of geological conditions and the high intensity of the mining. We accept that. Secondly, the economic considerations are of national importance. The hon. Member for Barkston Ash will accept that second point.
It is the Government view that alignment is primarily a matter for the sponsors of the Bill to defend. I know that they have consulted on the possible alternatives and that the one chosen is thought to have the least impact on people and homes. It is best from the point of view of local opinion. Objections to the proposed alignment which have not been aired can be fully aired in the Committee, as can objections to the Bill. We have yet to go through that procedure, but I hope that the House will allow the Bill to go through the Committee procedure, because those points can best be aired in that way, and I therefore recommend that the Bill be given a Second Reading.

Mr. Alison: Before the Minister sits down—

Mr. Deputy Speaker (Sir Myer Galpern): The Minister has sat down. I call Sir Paul Bryan.

11.4 p.m.

Sir Paul Bryan: First, I declare my interest. I share the Selby coalfield in my constituency with my hon. Friend the Member for Barkston Ash (Mr. Alison) in his. These problems affect us in rather different ways. His farmers will be robbed of land. My constituents will be robbed of their main line


railways. At present they get on at Selby, but once this arrangement has come to pass, they will have to go to York or further afield. That is not good news for them.
I am not an out and out opposer of the diversion of this railway. I should not be surprised if that is probably what will have to happen. But I am not affected either in my property, my life or my pocket, whereas one's constituents are. In their case I should like to know a lot more than they have been told so far. For a start, I should want to know a lot more detail about the pros and cons of this diversion. Hon. Members have studied this matter and know a lot about it, but these people do not. Some of them only recently discovered that a railway line will go through their farms. They want some justification.
Consultation has been absolutely minimal and inept. There is no reason why people should not have been told how these plans would affect them. Over the past five years or so, as the opening stages of the Selby coalfield have taken place, one has had to deal with the National Coal Board, the Department of the Environment and British Railways. The Coal Board has been very good with regard to sensitivity for the local population. From the start it has taken a lot of trouble to inform community organisations and others how the development will affect them personally.
On the other hand, the Department of the Environment has been bad, particularly with regard to the housing of miners and so on. In fact, the Selby District Council broke off negotiations for about six months because it simply could not get consideration from the Department.
British Railways has been the most inept of all. Before this inquiry was talked about I remember how at a presentation in the House of Commons Yorkshire Members were told exactly how this coalfield would be developed. There was not a mention of a railway being developed, although the people concerned must have known about it since it was literally three weeks before the inquiry.
As to the inquiry with which the Minister is so satisfied, a constituent of mine described it in rather more detail. He wrote:

At the Public Enquiry because the British Rail barrister was on holiday abroad the evidence of British Rail was given at the end of the enquiry and moreover in the absence of Mr. Potts the Mining Assessor who sat with Mr. Adamson the inspector. Many of the legal advisers to those attending the enquiry had already departed and the British Rail barrister was not adequately cross-examined. Furthermore at no stage in his evidence was it stated that the East Coast Main Railway Line would have to be diverted. He stated that consideration might have to be given to altering the route. Instead of applying for planning consent to divert the railway line to the Local Authority which could have lead to another Public Enquiry, British Rail has resorted to producing this Bill with no more information than it contains.

Mr. George Cunningham: The hon. Gentleman acknowledged that that information came to him from a constituent and not from his own knowledge.

Sir P. Bryan: Yes.

Mr. Cunningham: I am told by the British Railways Board that an agreed statement was read out by the Board's counsel to the inquiry—on the third day, as the Minister has said—which said unequivocally that the Board would seek to develop the railway.

Sir P. Bryan: I cannot call in aid the records of the inquiry, but I can say that everyone in the district will tell the hon. Gentleman that there was a furore about this. People claim that this was a last-minute affair and that they had not been consulted at all about it. It is against that background that I am talking.
At the present time, the correspondent adds:
On the assumption that one accepts the principle that coal has to be mined underneath the existing railway line and that a diversion is necessary many safeguards are required. However, to date British Rail and its parliamentary agents have proved to be extremely difficult about providing precise information on which to base the safeguards. The C.L.A. six weeks ago asked the parliamentary agents to arrange a joint meeting with it and the N.F.U. and British Rail. This was refused. The C.L.A. wrote again to the parliamentary agents saying that only a joint meeting together with the N.F.U. would be fruitful and asked for British Rail to give its reasons for refusing a joint meeting.
I cannot understand that sort of conduct. It seems to be asking for trouble. I do not greatly oppose this Bill, but I think that it would be as well to put it off for a few months in order to get information before imposing it on an unwilling population.

Dr. Edmund Marshall: The hon. Member for Howden (Sir P. Bryan) has just quoted from a letter that he said came from one of his constituents. It might be of interest to the House to know that I have a copy of the same letter. The person who wrote it is the regional secretary of the Country Landowners' Association for Yorkshire. In the first sentence the writer explains that he has received news that Members of this House will spend three hours late on Thursday "talking out" the Bill.

Sir P. Bryan: I said that the writer was a constituent of mine, which he is. The reason I did not identify him is that I have not got his permission to quote him.
There are many things that farmers want to know. They want to know what acreage is affected. All we have is a rather vague statement from British Rail in paragraph 4 which says:
The new route of the railway has been sited by the Board so as to be as unobtrusive as possible and existing roads and railway lines are to be carried over the diversion. The Board proposes to take steps to comply with the wishes of the local authorities in respect of the stopping up and diversion of roads and of landscaping, noise and archaeological exploration …
That is not the sort of thing about which working farmers want information. They want information about their own premises and their own countryside.
I do not think that my constituents have any knowledge of their compensation. By this time someone should have visited them and explained how they will be treated over compensation. I do not agree that the proposal by the hon. Member for Islington, South and Finsbury (Mr. Cunningham)—of objections afterwards—is the right way round. Why not prepare the ground before the shock arrives?
Drainage is a great worry in the area. There is a very high water level, drainage is difficult, and always has been. There is the question of how many farms will lose their viability. If a dairy farm is split in two by a railway, it will be worth a great deal less than before. That sort of thing should be thrashed out at an early stage.
In general terms, the advent of the Selby coalfield in this part of the country is not good news. There is a stable,

prosperous rural community, with full employment. Therefore, no one is looking for jobs. Although the coalfield is not welcome news, there has been cooperation from the local community, and I am sure that everything will work out well.
The advent of 4,000 miners and their families in a fairly sparsely populated area is rather unsettling, and great care needs to be taken to keep the community united. My only suggestion is that this is all happening too soon. We do not know when these developments will take place, so the right step would be to postpone it for a few months.

11.14 p.m.

Mr. Robert Banks: I have no constituency interest in the proposed railway line. It does not cross into my constituency, and I have no axe to grind with those concerned.
I accept that the line has to be realigned to allow for coal to be mined underneath, and I do not wish to delay British Rail in its attempts to do that. It is essential that the new route that is chosen is the right one, and it is to that aspect of the matter that I wish to address myself.
I have no axe to grind about the National Coal Board. I accept that it needs to mine coal under the existing line and that we should not attempt to delay its activities to that end. But British Rail's statement causes me some alarm. I believe that alternatives should have been discussed in the statement. Paragraph 3 of the statement merely says
The Board has carried out a study of possible alternative routes for the diversion of the line".
That is not good enough, because this new line will cost £35 million or thereabouts, and it will take a great deal of land—namely, 1,800 acres. We do not know the exact figure, but that is a great deal of valuable land.
No alternative has been given—apart from that put forward by my hon. Friend the Member for Barkston Ash (Mr. Alison), who made a most powerful speech in support of the Sherburn deviation. To what extent do we assume that British Rail has considered that deviation as an alternative? There is nothing in the statement to give us any guidance; on that matter.
Paragraph 3 of the statement also tells us that the route decided upon and provided for in the Bill was based on the ground that it will have the least effect on the inhabitants of the area and make a minimum impact on the environment. There is no mention of cost-effectiveness or whether this happens to be the most reasonable route proposed; nor are we told how much agricultural land is to be lost.
This brings me to the core of my remarks. I believe that in this small group of islands our most valuable asset is good, productive agricultural land. As the years go on, our population will increase and land will become more and more valuable in producing food for our people. It is a valuable asset that we shall lose at our peril.
Let me quote some figures to the annual loss of agricultural land to this country—not just because of the effects of railway building but in other ways, too. In the six years ending June 1975 we lost 76,000 acres of land to urban and industrial development as well as to road building. For example, I am told that the building of a motorway entails the loss of 23 acres for every mile of route. As we were now building 100 miles of motorway, it means that this year we are losing 2,300 acres just because of the effects of motorway construction. Furthermore, we are building this year 85 miles of dual carriageway. If we assume that we shall lose 20 acres for every mile of dual carriageway, we can calculate that we shall lose another 1,700 acres. We can ill afford to lose that valuable land, unless it is vital, essential and necessary that we do so.
The route is being chosen to enable trains to York to run that much faster, but on what basis is the route decided? It is decided on a calculation of maximum cost. The Sherburn deviation is far shorter in terms of the length of railway line that will have to be constructed, and I suspect that the amount of good agricultural land lost in that route would be very much less than the amount of acreage to be lost under the proposals in the Bill.
On that ground if on no other I feel that we should send the Bill back for further consideration. That would enable new arguments to be established to prove that the line—if it can be

proved—is the best that can be taken, taking into account the land that would be lost in construction and the cost-effectiveness in relation to the new high speed trains that we all want to see. If it means that they have to slow down to take into account the curve in the Sherburn deviation, and if that is the only alternative that argument must be put forward. However, it may be that there are other options. It may be that there is a line that is not quite so sharp in its definition but is similar to the Sherburn deviation. It may be that line would allow the high speed train to run at full speed. These equations have to be put to us. It is no use putting them to us when we have given the Bill a Second Reading and it has gone into Committee. We are dealing with a situation that it setting the seal on what will happen.

Mr. Albert Roberts: The whole thing is dependent upon getting coal out of the Selby coalfield. No reference has been made by the hon. Members for Barkston Ash (Mr. Alison) and Harrogate (Mr. Banks) to the taking of coal to the power station, which is what it is all about.

Mr. Banks: My hon. Friend the Member for Barkston Ash has referred to the line that is used to take the coal to the power station. He has said—I am sure that he is correct—that that is not affected by the proposals that we are now discussing. We are discussing the line that will replace the existing Selby line.
As we move into the 1980s, the land consumption to which I have referred—

Mr. James Lamond: From where did the hon. Gentleman get the figure that he quoted for the amount of land that would be used if this proposal were put into effect?

Mr. Banks: The figure was supplied by the Eastern Region Branch of the National Farmers' Union. It has been keenly aware of what the line will mean to its members and other farmers in the area. I said earlier that it is up to British Railways to tell us the figure that they have, and so far they have not given us that information.

Mr. James Lamond: Does the ability of the NFU to tell the hon. Gentleman accurately the amount of land that would be used bear out that it has considered the matter with care on behalf of its


members? Does that not contrast sharply with the earlier remarks that there are many in the area, including farmers, who did not know what was going on?

Mr. Banks: I understand that the NFU has not had the consultations with British Railways that it has sought. One of the weaknesses of the debate is that we do not come to this place with an assurance from British Rail that it has had proper consultations with the NFU, the Country Landowners' Association and other organisations, including the North Yorkshire County Council or any other council that may be affected. We do not have that assurance. The Minister has not been able to give us the assurance that there has been proper consultation.
If we consider the amount of land that will be lost as we move into the 1980s, we are talking about a loss per year of an area equal to half the size of the Isle of Wight. That is a serious consideration. If on no other consideration we should vote against the bill on the basis that if it goes through we shall have agreed to a line that will absorb much agricultural land for which an argument has not been made.

11.25 p.m.

Mr. Giles Shaw: We are all starting by declaring our interests. My interest is that I have been sitting here for the entire day hoping to get in on the steel industry debate. As I am still here at 25 minutes past 11 at night, I think that I should try to get it on Second Reading of this Bill.

Mr. Deputy Speaker: I think that it is unfair of the hon. Gentleman to take it out on British Rail.

Mr. Shaw: On the contrary, Mr. Deputy Speaker. I suspect that the value to British Rail and, indeed, to the steel industry of the new rolling stock and track is of direct relevance. But that is not the point that I want to make.
Earlier, the Under-Secretary of State made two comments which I found rather odd. One was that the line proposed by British Rail was best from the point of view of local opinion. Yet I was not aware that in any of the discussions which preceded this debate there had been any direct contact between British Rail and local opinion, other than an expression of view by counsel in the inquiry into the Selby field.

Mr. Horam: I am glad that the hon. Gentleman has raised that matter. I think that inadvertently I said "opinion" when I meant "people". I certainly want to correct the impression that there has been consultation with local opinion as such. I was making the point that, in the view of British Rail and those who were consulted, it is hi the interests of local people. There has been no consultation with local opinion.

Mr. Shaw: What representatives of local people have given that opinion to British Rail?

Mr. Horam: There has been widespread consultation. I think that my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) will mention with whom consultation has taken place in winding up the debate.

Mr. Shaw: I should be grateful if the hon. Member for Islington, South and Finsbury (Mr. Cunningham) would attempt to clear up that question, because by hon. Friends have some views on behalf not only of their constituents but of organisations within the area affected by the proposed route, which suggests that there has been inadequate consultation.
The Minister said that the procedures being followed are entirely correct for an extension of this kind. I do not dispute that. That is indeed so. But it is relevant that, on a fairly rare occasion such as a debate on a Private Bill affecting a new rail line, we should question whether the procedure is right.
We are talking about a splendid nineteenth century system whereby representatives of individual rail companies came to this House—no doubt in frock coats and top hats—and presented their petitions, Bills or proposals for the lordly and careful examination of Members of the Commons. But it is an archaic procedure compared with the normal processes of consultation for major inquiries not only on transport, but on new buildings, urban development and all the other amenities that affect our environment. I suggest to the Minister, in so far as he has responsibility for transport, and to his colleague, who has now left the Bench and who has direct responsibility in the Department of the Environment, that the procedure under which we are debating the Bill should be


re-examined. We have spent many hours in recent times trying to sharpen up the consultation processes—reference was made to the motorway consultation process—and, more than that, trying to make the Department of the Environment more sensitive to the general aspirations of those affected by environmental changes.
I return to the Bill. I declare an interest as a Yorkshire Member who has travelled on the East Coast main line almost every week for about 15 years. Therefore, I fully appreciate what this is all about. The main anxiety is whether it is sensible in popular terms for the line chosen to be proceeded with.
I start from a point of total agreement by stating my passionate support for the Selby coalfield development. I do not think that any Opposition Member has denied the economic advantages of proceeding with the extraction of coal from the Selby field as soon as possible.
I think however, that I can question with rather more gravitas the investment that British Rail is making in its highspeed train. If the Price Commission reports are anything to go by, British Rail still has to make out a case that this investment is sensible in terms of the return to the taxpayer from this development, although I appreciate the main conclusion that the Price Commission drew was that the electrification process—which I know is no part of the high-speed train development—was an even greater waste of public money in relation to the return that it was providing.
The question that we have to ask ourselves is whether, for the convenience of the high-speed train, this route is the one best suited to satisfy all interests. It clearly satisfies the interests of British Rail. It provides a straight track, ideal for the running of the high-speed train. But some high-speed trains are running on tracks that have substantial curves in them. Some hon. Members who are not present know the city of Bath, which the original high-speed train passes on its way from London to Bristol. It has to reduce speed very considerably; in any case, it unsually stops to pick up and set down passengers. But the high-speed train is designed to run through areas where the opportunities for length of straight line are restricted. The valley coming

out of Bath is restricted, but this by no means makes the high-speed train an operating disaster for British Rail on that route.
We have to decide whether this simple, straight route is worth the additional cost and is the most satisfactory one. The promoter said that the Committee proceedings provided the right occasion for persons to debate the matter in detail, but in those proceedings it is not possible to make detailed alternative proposals to try to persuade British Rail to change the Bill's contents. What the Committee proceedings will do, and should do, is to establish whether the Bill is fair and worthy of acceptance by the House. I do not think that it would be possible to persuade British Rail to amend the Bill in favour of any other alternative. It might be possible to persuade it to withdraw the Bill and to examine an alternative, and that is what my hon. Friend the Member for Barkston Ash (Mr. Alison) and others of my hon. Friends are seeking to do here and now.
They are saying that there is an opportunity for alternatives to be examined. In particular, the alternative offered by my hon. Friend the Member for Barkston Ash is not only cheaper in terms of capital cost but is singularly cheaper in terms of the use of agricultural land. It would seem to be a great improvement in terms of the Government's proposals in their document "Food from Our Own Resources."
The question that we have to decide is whether the fact that British Rail comes before us with this single proposal merits our full support. From what I have heard I feel that there has been inadequate consultation about possible alternatives. We have not heard, as we should have, about alternative plans A, B and C. which would cost £X million, £Y million or £Z million. If those alternative plans had been put forward, the House could have decided whether the recommended route was the most acceptable.
In the absence of that full consultation process—a process by means of which many local authority plans are discussed in public—and also in the absence of any details about alternative routes, we are left to determine whether we should accept the recommended route, which is certainly the most convenient for


British Rail but is not necessarily the least costly or the least obstrusive.

Mr. Gordon A. T. Bagier: Does it make sense to consider any alternative route that would not be able to cope with 56 trains a day, plus additional traffic? It does not make sense to come forward with something that is not operationally practicable.

Mr. Shaw: The hon. Member for Sunderland, South (Mr. Bagier) I think, with respect, is incorrect. We are discussing the realignment of the East Coast main line, which has nothing to do with individual lines carrying coal traffic to and from power stations. The whole object of the East Coast line is to allow the trunk route to remain untouched by the heavy development of coal traffic in and out of the Selby coalfield.

Mr. Alison: The hon. Member for Sunderland, South (Mr. Bagier) does not appreciate that we are not proposing that the new high-speed train should have to run on the east-west Hull-Leeds line which carries the coal traffic. We are proposing a totally new line which is merely a shorter and more curved deviation.

Mr. Shaw: The subject of coal extraction is in no way related to the Bill. The Bill has come before the House because of the necessity for realigning the main route for its normal trunk requirements. The coal traffic in and out of Selby is in no way related to the proposal. The requirement is because the existing line has to be replaced in view of the coal extraction. I certainly received a thump between the eyes when I suggested that it might be almost as cheap to leave the coal in the ground. That is obviously not the case.
I come back to the question whether this is the ideal route, although we know that it is the route preferred by British Rail. We are here as representatives of the public to take a view on whether this cost for this length of track would have a tangible consumer benefit. To divert and relay 14½ miles of track in the context of the general development of the high speed train is not a large intervention in percentage terms. If it costs, say, 50 per cent as much again to put this development through, we have to decide, as representatives of the taxpayer, whether it is a sensible investment.
Secondly, we have to ask what are the consequences to the traveller of being slowed down by the marginal four or five minutes that may be involved in taking a longer route which may be half the price in capital terms. Are we not being a little rash if we say that that four minutes is worth another £15 million or £20 million on the construction costs?
I am well aware that high-speed trains will offer highly competitive services, particularly against internal aircraft between certain points in Yorkshire and the South, and I look forward to being able to use the high speed train when it comes. If we are saying as taxpayers that it is worth £20 million of hard-earned British Rail revenue to lop off four minutes of running time between, say, London and York, I am bound to question that, and I question whether that judgment should be endorsed by the House.
I hope that the expressions of view from the Opposition Benches have not been too destructive of the proposal made by the hon. Member for Islington, South and Finsbury (Mr Cunningham) in sponsoring the Bill. We are seeking greater confirmation that British Rail has done its homework so that we may have more confidence that alternative routes are not thrown away simply because they do not appear to be quite so short and so fast. Alternative routes, particularly the one suggested, may be of just as much benefit to the public in real terms and of substantially more benefit to the public in financial terms.
In the present circumstances, in which any major development involving public expenditure should have our fullest scrutiny, we should be failing in our duty if we did not ask British Rail to think again upon this matter.

11.40 p.m.

Mr. Norman Fowler: Perhaps I may intervene as briefly as the Under-Secretary intervened.
When the hon. Member for Islington, South and Finsbury (Mr. Cunningham) replies to the debate, one subject to which he should address his mind and upon which he should inform the House more is public consultation. It is a theme that was dealt with and a point made very powerfully by my hon. Friends the


Members for Barkston Ash (Mr. Alison), Harrogate (Mr. Banks), and Pudsey (Mr. Shaw).
Of course, it is not those Members alone who feel this. I have a letter from the National Farmers' Union saying that it is still the general opinion in the district that the Bill should not proceed until every affected farmer has at least had the chance to discuss with British Rail exactly how the line and proposed route affect him. That is not an unreasonable aim for farmers to want to achieve in relation to this proposal.
Public consultation is a serious matter. In parenthesis, I say to the hon. Member for Islington, South and Finsbury and to the Under-Secretary that it is certainly a topic about which, in different circumstances, Labour Members would be very concerned indeed. That is why it was absolutely correct for my hon. Friend the Member for Barkston Ash to mention the comparison between road and rail in this respect.
When it comes to roads, we are agreed that there should be a procedure and that that procedure should, as much as possible, carry the support of both the Government and the Opposition and that it should have the confidence of the public. We are agreed that consultation should be as full and as lengthy as is necessary to meet the points at issue.
In the last two years, the Government themselves have set up the Leitch Committee, which has just produced a very full report upon road plans and how road investment decisions should be taken. The Government have set up another Committee on the procedure to be followed. Why have they? I make no criticisms of the Government for having done so. It is absolutely right that they should have done so. They have done so because all parties in the House think that public consultation is vital and that the public should be consulted. They do not think just that the public should be consulted. They believe that the public have a right to be consulted. That seems to be the essential message coming over to the hon. Member for Islington, South and Finsbury, who has put forward the Bill.
The hon. Member for Battersea, North (Mr. Jay) said that roads cannot be de-

bated in the House and that, therefore, this is a rather better procedure and that railways are being put under rather more scrutiny. He will be aware, as I am, that the Government's whole proposal is not only to have the very full public inquiry system of roads, and an improved inquiry system—which I know that the right hon. Member, for one, will support—but that in addition, road proposals should actually be debated in the House of Commons as well. I should have thought that the eventual outcome of the roads procedure, therefore, will be infinitely superior to the kind of procedure that we now have.

Mr. Jay: I would not disagree with that, but I did not say that the one procedure was better. What I said was that it was not fair to say that if it was a road proposal it would go before a public inquiry, but not mention that the road proposal would not have to go through the House. One must mention both in order to be fair.

Mr. Fowler: Mr. Fowler rose—

Mr. Deputy Speaker: Order. We are discussing the purposes of the Bill and not the procedures followed in the case of roads vis-à-vis rail.

Mr. Fowler: I accept what you say, Mr. Deputy Speaker, but it is right to emphasise that the essential concern expressed from this side of the House is that public consultation has been inadequate.

Mr. Deputy Speaker: Order. We are not debating new legislation to be adopted as a result of the Bill.

Mr. Fowler: I bow to your ruling, Mr. Deputy Speaker, but the argument aduced by my hon. Friends is that one reason for questioning the legislation is that public consultation has not been adequate.

Mr. Deputy Speaker: Order. It is permissible to discuss the adequacy of public consultation, but it is not permissible to start arguing that the rail procedure should be more in line with that adopted for roads.

Mr. Fowler: With great respect, Mr. Deputy Speaker, I was replying to points that have come up in the debate and I was addressing myself particularly to


a matter raised by the right hon. Member for Battersea, North.

Mr. Deputy Speaker: Order. The right hon. Member for Battersea, North (Mr. Jay) pointed out the different procedure under which motorways are constructed. I thought that that was sufficient for the hon. Member for Sutton Coldfield (Mr. Fowler).

Mr. Fowler: I regret that it is not sufficient, Mr. Deputy Speaker.

Mr. James Lamond: The hon. Gentleman is challenging the Chair.

Mr. Fowler: I would not dream of challenging the Chair. I am making the serious point, which I hope the House will take on board, that the public consultation procedure has not been adequate.
No one disputes what the Under-Secretary said about existing procedures having been followed, but he did not give his attention to the claim that the procedures are not adequate. In this sort of proposal, just as on road proposals, the public have a right to be consulted. I should have thought that that proposition would receive support from all parts of the House. There is surely nothing contentious about it in the 1970s.
Will the hon. Member for Islington, South and Finsbury guide us further about the consultations that have taken place? Everything that I have heard in the debate—and I have been present throughout—and everything I have read about the issue leads me to conclude that public consultation has not been adequate and the Under-Secretary's statement that existing procedures have been followed begs the question that they have clearly been shown to be lacking.

11.49 p.m.

Mr. Ian Gow: My hon. Friend the Member for Sutton Coldfield (Mr. Fowler) and others of my hon. Friends have questioned whether there has been sufficient public consultation about the contents of the Bill. If their fears are well placed—and I believe that they are—there can surely be no criticism of the House investigating the matter. There have been only two speeches in favour of the Bill. The others have been in opposition or have expressed the gravest doubts.
One startling piece of information was given to the House by my hon. Friend the Member for Barkston Ash (Mr. Alison). It was information which one might have expected to be contained in the statement produced on behalf of the promoters. It is that the cost—a minimum of £35 million—will be borne not by British Rail, as we might have been led to expect, but by the National Coal Board. That was news that was given by my hon. Friend. It was emphatically not news given to the House by the hon. Member for Islington, South and Fins-bury (Mr. Cunningham). It was not even confirmed by the Under-Secretary of State. It is peculiar that that information did not appear in the statement.
It may be regarded as a little strange that Opposition Members should appear in March 1978, as the champions of the mining industry. Nevertheless, it is in that guise that my hon. Friend the Member for Barkston Ash and I appear tonight. We are the protectors of the miners. I am glad that that provokes such warm enthusiasm for my hon. Friends.
If the Bill proceeds, a financial burden of £35 million—of course trifling by the standards of the British Steel Corporation but substantial to my hon. Friends and me—will fall upon the NCB. What has this to do with Eastbourne? A strange doctrine has crept into the debate. Hon. Members are declaring not that they have an interest but that they do not. I go along with the advice of Mr. Edmund Burke who said that once we were sent to the House we were entitled to hold opinions and to speak on matters whether or not they affected our consituencies directly. I have a right to argue about the expenditure of £75 million and the elimination of 2,000 acres of agricultural land.
The hon. Member for Islington, South and Finsbury does not represent a constituency in Yorkshire. He is not sponsored by the National Union of Mine-workers, by the railworkers' union, or the Associated Society of Locomotive Engineers and Firemen. Nevertheless, he who represents a southern constituency recommended the Bill. I dissent from the suggestion that I am not entitled to address the House on this Bill.

Mr. Deputy Speaker: So far the hon. Member for Eastbourne is strictly in order.

Mr. Gow: I am grateful, Mr. Deputy Speaker. But I might not now find myself in total accord with the Chair, and that is a matter of regret. I welcomed the intervention by the right hon. Member for Battersea, North (Mr. Jay) since he is in many ways an expert on these matters. He is a champion of the right of those who are affected by public authorities to express their grievances. He is the champion of the right of those who are directly affected by the proposals from the big boys to express their views. That is why, overtly or covertly, the right hon. Gentleman and I are at one on this tonight.

Mr. Jay: On a subject on which we are not at one, does the hon. Gentleman realise that if it is necessary to move this railway in order to get the coal, the cost of moving the railway is part of the cost of the coal, and that in that case it is perfectly reasonable that the money should be paid out of the proceeds of selling coal?

Mr. Gow: I was not commenting on whether it was wise or foolish, right or wrong. I was saying that it was not made clear by the promoters of the Bill that the £35 million was to come not from British Railways but from the NCB. The promoters are being less than frank on that.

Mr. Giles Shaw: On the question of the cost to the NCB, does my hon. Friend agree that the point to which we must address ourselves is whether the NCB will get the best or the worst bargain through being charged the £35 million willy-nilly?

Mr. Gow: That is why I was casting myself in the role, which seems to cause consternation to Labour Members, of a protector of the National Union of Mine-workers and the miners.

Mr. James Lamond: Did they ask you to?

Mr. Gow: That is the role I have cast myself in.

Mr. George Cunningham: Be serious.

Mr. Gow: I was asked about the Common Market. I read Clause 5 with consternation, as no doubt did the right hon. Member for Battersea, North, because it deals with railways measurement, not as

we have been accustomed to, in miles, but in metres.

Mr. Cunningham: Oh, really!

Mr. Gow: I was asked about this matter.

Mr. Cunningham: Be serious.

Mr. Gow: Hon. Members will see from the statement that the measurement of the railway is shown in metres. I believe that to be the first occasion on which a railways Bill has ever dealt with the measurement of railways in metres.

Mr. Cunningham: Big deal.

Mr. Gow: The proposal in the Bill involves the loss of 2,000 acres of agricultural land.

Mr. Woodall: It does not.

Mr. Gow: I readily concede that I may be mistaken about this, but this is the best assertion I can make on the subject. I also assert, and again I may be wrong, that the cost of these proposals will not be less than £35 million. Fewer than 2,000 acres may be affected but, whatever the area, the acreage will be substantial. The project will involve also a substantial amount of money, even by the standards of the Secretary of State for Industry. It is true that £35 million is about one month's loss in the steel industry, and by that standard it is a relatively small sum. But on whose side should the House of Commons be? Should we be on the side of those who are affected, or on the side of the big boys? The big boys are British Rail and the National Coal Board. I have an instinctive reaction in favour of the small man as against the big battalions. That is why I shall oppose the Bill.

12.5 a.m.

Mr. George Cunningham: With the leave of the House, I shall try to respond to some of the points made in the debate, particularly by the hon. Member for Barkston Ash (Mr. Alison).
The whole discussion illustrates the importance of Bills on a matter such as this being considered under the Private Bill procedure to which the House wisely decides to subject Private Bills. The hon. Gentleman finds it impossible to explain his new-found proposal to the House without the use of visual aids. In the Committee they will be much in evidence,
and the alternatives to the course proposed in the Bill will be able to be canvassed on that occasion.
It may be that some of the hon. Members who have spoken have not gone into the alternatives to the route proposed by British Rail very carefully, but British Rail have gone into the alternatives very carefully, and it is only after an exhaustive consideration of those alternatives that the route proposed in the Bill has been decided upon.
A number of hon. Members, particularly the Opposition Front Bench spokesman, the hon. Member for Sutton Coldfield (Mr. Fowler), have raised the question of consultation. Before the Bill was deposited in November 1977 the following bodies and individuals had meetings, in some cases more than one meeting, with representatives of the Board: the North Yorkshire County Council, Selby District Council, British Gypsum Ltd., the National Farmers' Union, the Country Landowners' Association, the British Waterways Board, the Yorkshire Water Authority, the Ryther Parish Council, various Ministries, the Forestry Commission, the Yorkshire Electricity Board, the Hambleton Parish Council, the Selby Internal Drainage Board, a firm of estate agents, the hon. Gentleman and a number of local farmers.
In addition, I understand that a meeting was held in January 1977 with several landowners under the hon. Gentleman's chairmanship, and a public meeting with representatives of the North Yorkshire County Council, Selby District Council, the NFU and the Country Landowners' Association was held on 4th November 1977. A public exhibition was put on at five towns and villages between 12th and 20th December 1977. So much for the charge that there has been inadequate consultation.
Although this evening the hon. Gentleman has put forward a specific alternative route, the Sherburn deviation, only as recently at 1st February he was putting to the chairman of the National Coal Board a quite different proposal, which was that the existing network to the west of the new coalfield should be employed, without the building of any new line. If he was that keen on what he

correctly styles the Sherburn deviation that could have been raised well before now and he could have been given more information about it than is possible if he raises it as his preferred solution only when the Second Reading debate is taking place.

Mr. Alison: The explanation is simple. I wrote to the chairman of the National Coal Board suggesting that this might be a cheaper alternative. He wrote back with a reasoned reply that it would interrupt the flow of coal trains, so I abandoned that proposal and switched rationally to the Sherburn deviation.
It should not be left to lay Members, who have to spend most of their time in the House, to sort out these alternatives. They should be properly canvassed, as the Minister canvasses his road proposals, with all the alternatives brought out into the open and properly evaluated and costed.

Mr. Cunningham: I must not allow myself to be drawn into what would be desirable proposals if we did not have the law as it is now. The fact is that British Rail has gone exhaustively into all the alternatives.
Finally, I draw to the attention of the House and the hon. Gentleman in particular some objections to the specific proposal that he has put tonight. The first is that it goes through the British Gypsum area and crosses over the area where the most valuable deposits lie.

Mr. Alison: So does the proposed line.

Mr. Cunningham: The proposed line does not, except marginally, go over the British Gypsum area and does not go over the most valuable deposits. The hon. Members proposed route would go over the coal workings at the southern end. It would have a serious effect on Hambleton. It would join the Leeds-York line in a built-up area and not in an unbuilt-up area, as will happen with the British Rail proposal. For those reasons and others, that alternative, although very much in the mind of British Rail as one of the possible alternative routes, was considered and rejected by British Rail before it went for this preferred alternative.
The lesson 1 leave with the House is that these are matters that can properly—

Mr. Giles Shaw: Would the hon. Gentleman care to comment on what are the precise costs? He will recall that there have been some estimates. What is the British Rail estimate of the cost of this route?

Mr. George Cunningham: I do not question the figures. I am informed that those figures are approximately correct.

Question accordingly agreed to.

Bill read a Second time and committed.

EXPENDITURE

Ordered,
That the Standing Order of 18 November 1974 relating to the nomination of the Select Committee on Expenditure be amended, by leaving out Mr. Frank Hooley and Mr. Eric Moonman and inserting Mr. John Watkinson and Mr. Tom Pendry.—[Mr. Walter Harrison.]

—[Mr. Walter Harrison]

PUBLIC ACCOUNTS

Ordered,
That the Standing Order of 18 December 1974 relating to the Public Accounts Committee be amended, by leaving out Dr. Oonagh McDonald and Mr. Caerwyn Roderick and inserting Mr. John Evans and Mr. Hugh Jenkins.—[Mr. Walter Harrison.]

—[Mr. Walter Harrison]

The lesson I leave with the House is that these are matters that can properly be gone into in the Private Bill Committee, to which this Bill will go if it gets a Second Reading tonight.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 63, Noes 6.

Division No. 144]
AYES
[12.06 a.m.


Armstrong, Ernest
Harper, Joseph
Parry, Robert


Bagier, Gordon A. T.
Harrison, Rt Hon Walter
Panhaligon, David


Bates, Alf
Horam, John
Roberts, Albert (Normanton)


Benn, Rt Hon Anthony Wedgwood
Jackson, Miss Margaret (Lincoln)
Roderick, Caerwyn


Brown, Hugh D. (Provan)
Jay, Rt Hon Douglas
Roper, John


Cocks, Rt Hon Michael (Bristol S)
John, Brynmor
Rowlands, Ted


Cohen, Stanley
Jones, Alec (Rhondda)
Sillars, James


Coleman, Donald
Kerr, Russell
Skinner, Dennis


Conlan, Bernard
Lamond, James
Smith, John (N Lanarkshire)


Cowans, Harry
Loyden, Eddie
Snape, Peter


Cox, Thomas (Tooting)

Spearing, Nigel


Cryer, Bob
Lyons, Edward (Bradford W)
Stallard, A. W.


Davidson, Arthur
Mabon, Rt Hon Dr J. Dickson
Tinn, James


Davis, Clinton (Hackney C)
McDonald, Dr Oonagh
Urwin, T. W.


Dean, Joseph (Leeds West)
Mahon, Simon
Wainwright, Edwin (Dearne V)


Dormand, J. D.
Marks, Kenneth
Ward, Michael


Douglas-Mann, Bruce
Marshall, Dr Edmund (Goole)
Wise, Mrs Audrey


Eadie, Alex
Marshall, Jim (Leicester S)
Woof, Robert


Fowler, Gerald (The Wrekin)
Mendelson, John



Gourlay, Harry
Mulley, Rt Hon Frederick
TELLERS FOR THE AYES:


Graham, Ted
Oakes, Gordon
Mr. George Cunningham and


Grant, George (Morpeth)
O'Halloran, Michael
Mr. Alec Woodall.


Hardy, Peter
Orme, Rt Hon Stanley





NOES


Alison, Michael
Fairbairn, Nicholas
TELLERS FOR THE NOES:


Banks, Robert
Gow, Ian (Eastbourne)
Sir Timothy Kitson and


Durant, Tony
Sims, Roger
Mr. Giles Shaw.

NATIONALISED INDUSTRIES

Ordered,
That the Standing Order of 15th November 1974 relating to the nomination of the Select Committee on Nationalised Industries be amended, by leaving out Mr. Neil Kinnock and inserting Mr. David Stoddart.—[Mr. Walter Harrison.]

DOON VALLEY (DEVELOPMENT AREA STATUS)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Walter Harrison.]

12.16 a.m.

Mr. James Sillars: The people of Doon Valley are very grateful that this subject should have been selected for debate this evening. For them the development status of the area.
with implications for future levels of employment, is a matter of supreme importance.
The constituency of South Ayrshire covers 700 square miles, and has a number of communities in different areas, all of which fact: considerable problems over employment. We already have two special development areas—one of long standing covering the Girvan district in the south, and one in the north at Cum-nock, the designation of which is of more recent origins, and is relevant to the subpect of the Doon Valley.
I emphasise that I do not and nor does anyone else in the Doon Valley object to the designation of Cumnock as a special development area. Although Cumnock is not the subject of the debate this evening, unemployment is high there too. There is constant anxiety about future developments and the special development area status is fully justified and should be retained. There is no question of Cumnock versus Doon Valley. My contention is that both areas justify special status, and my complaint is that only one area of need has been recognised.
It is a tribute to the fair-mindedness of the people of the Cumnock district that they have expressed shock at the exclusion of Doon Valley and that they give full support to its inclusion. There are anxieties and problems in most parts of South Argyleshire, but one could find unanimous agreement that the area with the greatest number of problems, and that which faces, the most acute jobs crisis, is the Doon Valley.
My purpose is to prove the case that the Doon Valley should be included in the special development status given to Cumnock just under a year ago. To make the case I want to sketch in some of the background and provide details of the character of the problem confronting us now.
The main villages are Dalmellington, Bellsbank, Patna, Rankinston, and Dalrymple. The total population is about 10,000 in these villages. The coal deposits underlying most of the area gave rise to the rapid development of the Valley, starting around 1840, when the iron masters moved in to exploit the mineral wealth. Exploit them they did, and they exploited the labour, too.
Ironfounding declined from the turn of the century and by the 1920s it was coal mining that dominated the Valley. It is still coal mining, with only one pit left—Pennyvenie colliery—that dominates employment. One pit, and still no alternative work for men.
It is not as though this situation that we face is new. There have been six colliery closures since 1952. In 1960, total colliery manpower was 2,034, which, together with associated activities, gave us a male work force of 2,202. By 1970 that had declined to a total work force of 1,056, and we are now down to just around the 500 level. In the past eight years, since I became the Member for the area, the needs of the Doon Valley have been raised several times in similar debates, and the local authorities and interest groups within the area have persistently pressed for action.
What I have described is a pattern of exploitation which has been the curse of the Doon Valley—namely, all give and no take, and the extraction of wealth with no retention or return of industrial investment to secure the future of the people without whose effort the wealth would never have been produced.
It has been pointed out to me with some force by Tom White, the district council's area officer, that the pattern of exploitation continues. The NCB opencast executive is now working on the Beoch area, above Dalmellington and, with an annual output of around 192,000 tons in a highly profitable operation, is taking the last of the coal-based wealth from the valley. Again the valley gives.
Because of the dominant position of the coal industry in the area, and because coal has been in public ownership for 30 years, the Doon Valley and its people have, in effect, been in public ownership. They are entitled to expect from that situation, to which Socialists strive, better treatment than they have received.
Had the iron masters remained in control these past 30 years and ripped off the wealth of the area and left it in a state of decline and demoralisation, they would rightly stand condemned. The fact that they were replaced by a publicly-owned industry, with Government assuming public responsibility, in no way lessens the condemnation. Indeed, the degree of condemnation increases because the replacement of private by public control


is supposed to avoid what the valley is now going through.
The position that we now face is grim. The local councils—Strathclyde Regional Council and the district council—have appointed an area co-ordinator. This post for the Doon Valley has been set up on an experimental basis for three years to tackle the worst effects of multiple deprivation.
This initiative comes after the publication by the district council of a special report on the Doon Valley, which was published in September 1976. That report highlighted the priority category of the valley. I quote from paragraph 3.3:
The most recent blow to the employment situation came from the closure of the Minnivey Colliery, which stopped production in November 1975, with the loss of 290 jobs. The only remaining colliery at Pennyvenie has an employment force of 440 but the reserves in this colliery are not expected to last for more than four years at the outside. The number of new jobs required to absorb the labour available from this pit closure alone is evidence of the need for immediate action if the existing communities are to remain viable.
Later the report went on to state, in paragraph 7.2:
Very briefly, it is clear that the failure to act quickly and attract industry to the Doon Valley will result in a considerable blow to the communities involved. One very possible scenario would include a rapid fall in population due to out-migration, the increase in unemployment rates, the decreased likelihood of entrepreneurs investing in the area, an ageing population, the declining viability of schools, shops and other essential services, the gradual worsening of public transport, etc. Cause and effect may be difficult to establish, but all factors would serve to mutually reinforce each other in an inevitable and vicious downward spiral.
That is what is happening now. We are in a downward spiral. With constant fears about the life-span of Pennyvenie, unemployment rising, an absence of any moves on a new industrial base, morale among the people is sagging again.
I shall show figures to prove that I do not exaggerate. These were presented at a meeting called by the area co-ordinator, held in Patna on 26th January. They are the figures for male unemployment based upon a 17 per cent, sample of the village communities. They are as follows: Rankinston, 29·8 per cent.; Patna, 19·7 per cent.; Dalrymple, 21·6 per cent.; Dalmellington, 33·2 per cent.; Bellsbank, 25·2 per cent.; and the Doon Valley as a whole, 25·2 per cent. If anything happened to the Pennyvenie colliery, the

figures would leap upwards, with some areas having male unemployment of between 30 per cent, and 40 per cent.
I understand that it is not the remit of the Department of Industry to answer for Pennyvenie. I have already sought assurances from the Department of Energy and the National Coal Board about the life of the colliery. Everyone knows that there is limited life there, and that makes it imperative to get new industry in with male jobs.
Given the levels of unemployment, the pronounced decline in mining, the precarious position of the last pit, the need to demonstrate that the people of the valley are not forgotten and the known views of the district council for special treatment, it came as a stunning blow to be excluded when the Cumnock designation took place.
Cumnock and Doon Valley district is in two distinct parts. To extend special development area status to one part and exclude the other more depressed area is obvious nonsense. Moreover, it is dangerous nonsense, as it totally undermines the strategy adopted by the regional and district councils. It puts the Doon Valley at a serious disadvantage when everyone states without equivocation that it needs to be advantaged.
Since that remarkable error of judgment I have been to both the Minister of State, Scottish Office, and the Minister of State, Department of Industry. I have taken local authority deputations to both Ministers. I have written on a number of occasions to the Minister of State Department of Industry. I am told by him in correspondence dated 2nd March that he is
still considering the representations about Special Development Area status but I do see considerable difficulties in making any further substantial upgradings at this stage.
What no Minister has yet explained, and the people are entitled to know is why the Doon Valley was excluded in the first place. Given the facts of the situation, it was an incredible blunder. That point requires an answer tonight. Did the Department make the necessary inquiries? Did it know the facts, or did it overlook the valley altogether when making its assessment of where to place the designation of special development area status? We are not talking about making "further substantial upgradings"


but of correcting an obvious and glaring injustice to a community of just over 10,000 people.
I hope that when my hon. Friend replies he will not shelter behind the device that the Doon Valley is included in the Ayr employment exchange area, and that this makes it difficult to identify it administratively and thus to give it special development designation. I tell him in advance that to plead administrative problems is not acceptable. Any administrative problems pale into insignificance when compared with the valley's unemployment rate, its bleak economic condition and the needs of the people.
My experience is that where there is a political will—the Government's wages policy is an example—there is an administrative way. What has been lacking so far is the acknowledgement of error in excluding the valley, an acknowledgement that it must be an area of high priority, and the political will on the part of Government to make it such. Without those, it is patently obvious that so-called administrative problems are mere excuses for inaction.
What surprises many people in the Doon Valley and, indeed, in the Cum-nock area, is that this case should have to be made at all. Everyone else except the Government regards it as self-evident.
University departments concerned with policies of rehabilitation know about the Doon Valley. Those committees of Strathclyde Regional Council which deals with multiple deprivation and industrial policy, know of the special problems afflicting the Doon Valley. The district council told the Scottish Office in its report in 1976 that it wanted special development area status. The Scottish Development Agency knows how special the problem is. A large number of people walking about the streets in the West of Scotland know of the special nature of the problems in the valley, because of the publicity given to it over a long period. Everyone, it seems, knows except the Government.
The people that I represent in the valley are feeling sore. When they want to be picked our. for special industrial help, they are ignored. When they do not want to be picked out as a possible nuclear waste area, they are picked out.

Legitimate requests for industrial action go unheard and equally legitimate objections to nuclear waste projects also fall upon deaf ears. They feel used and abused.
Understandably, the Government's reputation in the Doon Valley is not high. Even their most active supporters feel let down. There is an opportunity tonight, with an affirmative to my request for special development area status, for the Minister to restore some of that lost faith.
Earlier in my remarks I said that South Ayrshire had a number of priority areas. That is true. But the Doon Valley on any and every test is the most urgent. No matter the measurement criterion—be it geographical location, geology, topography, social environmental, economic, industrial—the Doon Valley is an outstanding priority. The people would prefer that this were not the case. They want it to be different. They deserve to have it different. But to achieve the progress that will make it different, we need recognition from the Government. I ask my hon. Friend to start tonight by conceding the case.

12.31 a.m.

The Under-Secretary of State for Industry (Mr. Bob Cryer): The hon. Member for South Ayrshire (Mr. Sillars) has raised an important issue tonight. I think that in some instances he has been unfair. Some of his harsh words demonstrate that certainly he is not the Labour Party supporter that he was, for instance, when I first entered the House. I expect him to be critical, but I think that he has veered over to unfairness, because clearly everybody is concerned about the level of unemployment, and it stretches far wider than the Doon Valley.
The question of special development area status for the Doon Valley is currently being considered by my right hon. Friend the Minister of State, Department of Industry, in consultation with the Minister of State, Scottish Office, and a decision will be announced as soon as possible. I am grateful to my hon. Friend the Under-Secretary of State for Scotland—the Member for Glasgow, Provan (Mr. Brown)—for being here tonight and taking a close interest in this debate.
Any consideration of an application for a change in assisted area status necessarily takes time as many factors must be taken into account. The situation in the area in question has to be reviewed in the light of the statutory criteria for designation of assisted areas as denned in Section 1 of the Local Employment Act 1972 as amended by the Industry Act 1972. These require the Secretary of State to have regard to
all the circumstances, actual and expected, including the state of employment and unemployment, population changes, migration and the objectives of regional policies".
In addition, the consequences of an upgrading must be considered most carefully, including the effects on existing assisted areas and on the non-assisted areas and the possible repercussions from areas with equally strong cases. I shall mention those later. Thought must also be given to what is the most effective way of helping to solve an area's problems. Higher assisted area status, although it is pressed on the Government by a number of local authorities, is not always the most appropriate solution.
Regional policy is inherently a long-term policy. It seeks to deal with underlying structural, industrial and employment problems by promoting investment by existing companies and encouraging mobile investment projects to move to the assisted areas. That necessarily takes time. If regional policy is to be successful, it must be stable. Frequent changes of status can only lead to uncertainty in industry and cause companies to discount the incentives available in making their investment decisions.
At a time when investment is low throughout the country, the Government must avoid doing anything which might discourage investment or deter companies from moving to the assisted areas. One of the great problems now is that there are not sufficient mobile projects to satisfy all the demands and to meet the level of unemployment. Several changes were made last April, and consequently the Government are reluctant to alter further the assisted area boundaries unless it is absolutely necessary.
There is a further reason why this would be a bad time to make changes in the assisted areas. The effectiveness of regional policy is inevitably limited in a recession. There are few mobile pro-

jects around; changes in the extent of the assisted areas have little effect on the total amount of investment undertaken in the country; structural problems become swamped by problems caused by the recession, and regional policy is not primarily intended to meet these problems. The Government have introduced other measures to deal with the effects of the recession, and I shall come to those later. It is very difficult to identify long-term trends at present, as they have been overlaid with the very high unemployment that is being experienced in most places. There is thus a strong case for leaving the coverage of the assisted areas unaltered until overall unemployment begins to fall.
The assisted areas are already very extensive. Forty-three per cent, of all employees and 65 per cent, of land area fall into some sort of assisted area at present. The more extensive the coverage, the less prospect there is of effectively helping all the areas concerned, particularly those areas with the worst problems. Regional policy is a discriminatory policy, and any addition to the assisted areas automatically erodes the preferences enjoyed by the existing such areas. Similarly, an extension of special development areas reduces the advantages enjoyed by the present ones. It is therefore Government policy to counterbalance any upgradings with corresponding downgradings. The hon. Member will appreciate that in the current economic climate downgrading is not a simple matter.
The hon. Member said that it is only a small adjustment that he is seeking, but my right hon. Friend the Minister of State for Industry must also bear in mind the likely repercussions of upgrading one area, even if this is only a small one. If there are other areas with stronger cases for upgrading these applications must in all fairness be granted too, the result of which would probably be a large increase in the areas with special development area status. This would clearly have a significant impact on other areas and would reduce the preferential difference between special development area status and other area statuses.
I should point out to the hon. Member that we have had several applications, and there are a number of development areas of the same status as the Doon Valley


with levels of unemployment that are higher. I do not put that forward as any sort of compensatory case, but the fact is that we have to consider any other applications that might result. The hon. Member referred to unemployment figures from a survey which disclosed higher levels of unemployment than the average for the employment office area.

Mr. Sillars: Can the Minister tell me why Cumnock was designated a special development area when its position is not as bad as that of the Doon Valley?

Mr. Cryer: When the decision was made we took many factors into account in the granting of special development area status to Cumnock. The hon. Gentleman must understand that if we were to alter the status of the Doon Valley we would have applications flowing in, on the basis that he outlined tonight, from Cardigan, with 16·8 per cent, unemployment; Tenby, with 18·5 per cent.; Wrexham, with 12·5 per cent.; Lampeter, with 17·8 per cent.; Helston, with 19·5 per cent.; Ilfracombe, with 19·4 per cent.; St. Ives, with 20·1 per cent.; Newquay, with 15·0 per cent.; Falmouth, with 13·1 per cent.; Newton Stewart, with 16·4 per cent.; Stranraer, with 11·8 per cent.; Wick, with 12·3 per cent.; and Campbeltown, with 12·5 per cent, as against the hon. Member's travel-to-work area rate of 10·8 per cent.
All those levels are too high and are a signal reflection of the failure of private enterprise to invest in this country. We have to remedy this in whatever way we can.
The Government would have to deal with applications of that sort if they were to consider the position fairly across the board. Of the development areas that I have read out, several have applied for SDA status in recent months. It is not a question of the possibility being there o they have actually applied.
Designation of assisted areas is by employment office area. These are the links that correspond most nearly to the local labour markets, and the boundaries of the Employment Service Agency are defined on the basis of travel-to-work movements. Moreover, these are the units for which the relevant data on unemployment and job vacancies are most readily available.
The Doon Valley is part of Ayr employment office area. The hon. Member suggested that this was an anomaly, as Doon Valley is part of the Cumnock and Doon Valley district, most of which falls in the Cumnock employment office area and consequently has special development area status.
I can assure the hon. Member that this is not an exceptional case. Local authority areas do not correspond, except coincidentally, with local labour market areas, and there are many local authority areas which contain areas with different assisted area status. The hon. Member has, moreover, suggested that the employment office area boundaries should be adjusted. We have looked into this point and consulted the Employment Services Agency, and we have concluded that the current boundaries are correct. We have examined the travel-to-work patterns within the area and are satisfied, after such close examination, that the current boundaries are correct.
The Doon Valley is not a self-contained economic unit, so it would not be appropriate to make it a separate employment office area. The travel-to-work patterns confirm that a sizeable number of inhabitants of the Doon Valley look to Ayr for employment. The links with Cumnock are very much weaker, and it would be inappropriate to transfer the Doon Valley to the Cumnock employment office.
This is not an administrative device, nor is it an excuse for inaction, as the hon. Member suggested. The Government by no means underestimates the problems of the Doon Valley, which the hon. Member described. Unemployment is unacceptably high, as it is hi other parts of the country. The Government are committed to reducing these high levels of unemployment and, to do so, have introduced special measures to create and sustain jobs and to stimulate industrial investment. For example, the workers' co-operative in Patna, which is known locally as "Sadie's Ladies", has had a grant from the job creation projects scheme of £52,000 to maintain 25 jobs for a year.
The Scottish Development Agency is in close touch with this very important development. Several schemes have been established to promote investment and to


aid particular sectors of industry. A project in the Ayr EOA has already been offered assistance worth £127,000 under one of these schemes.
Furthermore, the Government recognises that all of Ayrshire, and the Doon Valley in particular, has serious structural problems. That is why it has development areas status. Projects in the area are eligible for regional development grants on buildings, plant and machinery, and for selective financial assistance under Section 7 of the Industry Act 1972. Both Ayr and Cumnock have already received a substantial amount of aid from these sources. Within the last two years, each EOA has received offers for three projects; offers to Ayr EOA amount to nearly £3·2 million towards total costs of £21·9 million for projects expected to create 778 jobs. In Cumnock offers worth £734,000 have been made towards costs of £4·7 million, and about 756 jobs are expected to result. Inhabitants of the Doon Valley should be able to benefit from this new employment. In particular, the major development by Digital Equipment Corporation at Moss Hill industrial estate is sited within easy reach of the Doon Valley.
The area is also receiving help from the Scottish Development Agency, which is well aware of the problems of the Doon Valley. The needs of the area are taken into account in the development of the Agency's programme over the whole range of its functions. For example, two advance factories are to be built at Dalmellington, and various environmental projects have been undertaken, including four derelict land clearance schemes. In Cumnock the Agency has taken on a major holding in Stonefield Vehicles Limited, and has plans to build extensions to factories within the employment office area.
Both the Agency and the Scottish Office hold meetings and seminars with local councils and industrialists to ensure that they are aware of the incentives available to them, and to encourage them to invest.

The Doon Valley should not feel that it is being neglected by the Government in any way.
As the hon. Member is no doubt aware, the Cumnock and Doon Valley District Council is working hard to attract projects to the area. It has an advance factory in Patna, which it is hoped will be occupied in the very near future, thereby creating more jobs in the Doon Valley itself.

Mr. Sillars: It is.

Mr. Cryer: Yes, indeed. In fact, negotiations are at an advanced stage for that.

Mr. Sillars: There must be something wrong with my hon. Friend's brief. People have actually started working in there.

Mr. Cryer: There is nothing wrong with my brief. All that I can say to my hon. Friend is that negotiations are at an advanced stage for Government assistance of some sort or another to this venture.
The small firms employment subsidy, which was introduced for a trial period of one year in special development areas, is now being considered for a much wider geographical coverage so that the differentiation between a special development area and a development area for the purposes of the small firms employment subsidy, which grants assistance to small firms of less than 50 people, may soon no longer exist.
As I said earlier, my right hon. Friend the Minister of State, Department of Industry is looking carefully at this application for special development area status, and he will certainly take note of the points the hon. Member has made here tonight. There are many factors to be considered, and the hon. Member will be notified of his decision as soon as possible.

Question put and agreed to.

Adjourned accordingly at fourteen minutes to One o'clock.